Sustainability Report Considers These Views When Reviewing Our Disclosures Sustainability Goals and Progress

Delivering A Brighter Future, Together.

2019 SUSTAINABILITY & CORPORATE RESPONSIBILITY REPORT GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 2

0.0 INTRODUCTION 3 Measuring our Progress 19 4.0 PEOPLE 50 A Message from Our CEO 4 Stakeholder Inclusiveness 20 Building Our Reputation as a Great Place to Work 52 2019 Highlights 6 Materiality 22 Creating the Conditions for People to Flourish 54 A Message from Our Sustainability and 8 Principles-based Approach 24 Capitalizing on Capability 69 Corporate Responsibility Committee Our Behaviors, Mission and Vision 25 KBR and Ethics 27 5.0 PROSPERITY 74 1.0 OVERVIEW 9 Risks and Opportunity Oversight 29 Our Social Value Program 76 Our Sustainability Journey - 10 Community and Social Vitality 80 Building a Foundation for the Decade of Action 3.0 PLANET 32 Supporting Human Rights 82 KBR’s Ten Sustainability Pillars 11 Environmental Impact 34 Employment and Wealth Generation 86 About Us 12 Technology Solutions that Drive Sustainability 41 About this Report 87 for Our Clients Memberships of Association 87 2.0 GOVERNING WITH PURPOSE 14 Climate Change: Mitigation and Adaptation 47 Sustainability Oversight 16 Managing Our Carbon Footprint 48 6.0 APPENDIX 88 Our Sustainability Approach 17 GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 3

Introduction

In This Section By committing to sustainability, A Message from Our CEO 3 2019 Highlights 6 we take a shared responsibility for Step One Step Two One Ocean 7 achieving a better world. A Message from Our Sustainability and 8 Corporate Responsibility Committee UN Global Compact GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 4

Message from Our CEO Step One Step Two KBR’s One Ocean Message from Our Sustainability & Corporate Responsibility Committee

A Message from Our CEO

As I write this, the world is in the midst of a global health crisis Our first objective was to focus on strengthening our internal sustainability efforts — unlike anything experienced in generations. Over the course examining our own carbon footprint, determining ways to reduce waste at our sites, of the past year, COVID-19 has caused seismic shifts in the way investigating a switch to smart meters and renewable energy and assessing our travel we live, interact and do business. However, as much as this has policy, for example. By measuring our 2019 carbon footprint, we have created a baseline disrupted our lives, it has also given us a chance to embrace from which to target reductions in our carbon emissions over time. In the short term, we change and think differently. I’m proud to say that at KBR, it have kicked off our Climate Action Plan by offsetting our 2019 carbon emissions to be carbon has been a tipping point for transformation, and we have used the opportunity to reimagine neutral. We are now developing a plan to achieve net-zero carbon emissions by 2030. how we do business. It’s taught us the importance of resilience and the need for agility and diversity. It has also taught us that together, we can take on challenges of this magnitude and The Global Sustainability Committee also developed a company-wide sustainability continue to thrive. campaign. We began by broadening our industry-leading Zero Harm safety culture to include our sustainability objectives, because we believe that Zero Harm is not only about doing what We have not lost sight, however, of the other challenges taking place in the world today, is right to keep ourselves and others safe and healthy, but it’s also about doing what’s right for especially climate change, environmental degradation and social upheaval that influences our planet, people, communities and business. The campaign included the introduction of our our business environment. ten Sustainability Pillars, the key areas within the company where we are focusing our efforts to mitigate our social and environmental impact. In 2019, the year covered in this report, I established our Global Sustainability Committee made up of a diverse group of our employees. This was in response to the strategic overview In addition to this, we audited the business for projects, initiatives and technologies that provided by KBR’s Sustainability and Corporate Responsibility Board Committee. This Board facilitate positive environmental and social impact through the work we do with our clients. Committee set out a corporate sustainability policy, and the Global Sustainability Committee We found over 60 areas where we are already increasing energy efficiencies; extending asset has been adapting procedures and management approaches to reinforce our social and life; developing technologies to capture and sequester carbon; improving water efficiencies environmental impact. through innovative infrastructure; harnessing wind power through the development of floating GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 5

Message from Our CEO Step One Step Two KBR’s One Ocean Message from Our Sustainability & Corporate Responsibility Committee

wind farms and substations; developing electric vehicle charging platforms; and others. As creative thinkers with diverse ideas, backgrounds and perspectives. For this reason, we a company with such a wide scope of services, technologies and expertise, we recognize we developed an action plan for the establishment of the Global Inclusion and Diversity Council, have an incredible opportunity to drive positive change, innovation and improvements for for which I am the executive, and I appointed a dedicated leader for KBR’s Inclusion and key markets by assisting our clients in their sustainability journey. Diversity initiative to champion our mission and vision in this area. We are committed to developing a workplace culture where everyone can reach their full potential while being Crucially, we are also well positioned to become global leaders in energy transition through themselves at work. a combination of expertise and experience in designing and managing mega projects and developing and executing on large-scale government contracts, coupled with our In this report, you will read about the dedication of our people, from the determination of proprietary technology in key areas, such as ammonia and hydrogen. This work will support executives to strategically embed sustainability at the policy level, to helping customers the move toward low-carbon economies and net-zero plans for governments and industries mitigate their environmental impact, right through to our graduates, who have volunteered over the next decade. time and offered insight and ideas toward driving innovation and positive impact for the Planet and People. Most importantly, we know we can only achieve this with our incredible people, who are at the heart of our business. It is their passion, teamwork, trust and drive towards a sustainable One of the highlights you will read about in the report is our sustainability education future that underpins our success. program, One Ocean, which we launched globally in schools in Saudi Arabia, India, Singapore, Poland and Australia, and also with local environmental charities in the U.S., Creating and promoting a culture that puts the safety and well-being of our people, both connecting with more than 1,000 students. This program is part of our effort to build a resilient physical and mental, is at the forefront of our efforts. We pride ourselves on our Zero Harm and diverse talent pipeline by showing the next generation that our industry can be leaders culture and continue to lead the way in developing a safe and caring environment for all in developing creative and innovative solutions towards sustainable development. Ultimately, our employees and the communities in which we operate. we know that it is only with a deep commitment and sense of purpose that we will prosper and grow for the long term. We also recognize that an inclusive and diverse workforce is fundamental to our success. To meet the challenges that sustainable development will bring, we need innovative, GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 6

Message from Our CEO Step One Step Two KBR’s One Ocean Message from Our Sustainability & Corporate Responsibility Committee

Step One to Carbon Neutrality

We commissioned a leading third-party solution provider for corporate climate action, ClimatePartner, to calculate emissions for scopes 1 and 2 and category 6 of scope 3 (business travel) in 2019. OUR CARBON FOOTPRINT

We used our footprint to inform our offset program for 2019 to reach carbon neutrality for this year. Heating 2.73% Cooling Scope 1 Train travel 0.34% We became carbon neutral by purchasing carbon credits from wind farms in 0.02% 3.77% India and contributing to projects run by the Plastic Bank across the world. Vehicles 0.70% Electricity 30.14% Scope 2 Step Two to a Net-zero Commitment 30.14% Air travel Scope 3 Our 2019 footprint helped identify carbon emission hotspots and we will set carbon 66.07% 66.09% reduction targets defining our climate action goals for 2020 and onwards.

We will continue to reduce scope 1 and 2 emissions, and we will consider and expand scope 3 categories, in line with the requirements for setting science-based targets. EMISSIONS PER EMISSIONS PER CATEGORY SCOPE We are using science-based targets to establish longer-term climate action and net-zero commitments for 2020 to 2030. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 7

Message from Our CEO Step One Step Two KBR’s One Ocean Message from Our Sustainability & Corporate Responsibility Committee

KBR’s One Ocean

One of the highlights for this year was our sustainability education program, One Ocean, which we rolled out globally in schools in Saudi Arabia, India, Singapore, Poland and Australia, while also partnering with local environmental charities in the U.S., connecting with more than 1,000 students. This program is part of our effort to build a resilient and diverse talent pipeline by showing the next generation that our industry can be leaders in developing creative and innovative solutions towards sustainable development. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 8

Message from Our CEO Step One Step Two KBR’s One Ocean Message from Our Sustainability & Corporate Responsibility Committee

A Message from Our Sustainability and Corporate Responsibility Committee

In this report, you will see we have widened our three pre- environment. With this will come increasing pressure As members of the UN Global Compact, we have aligned the existing sustainability themes to cover 10 pillars, five across and expectations from our key stakeholders, clients and business strategy with the Sustainable Development Goals, social impact and five across environmental. Our approach employees especially, to respond. The business must therefore based on the Global Compact’s principles-based approach. to growing a prosperous business and governing with acknowledge and embrace the risks and opportunities In addition to this, the importance of the recommendations purpose is underpinned by these pillars. transparently. This report sets out how we plan to do both. from the Task Force on Climate-related Financial Disclosures is recognized and will guide the business’s climate strategy over With this we commit to contributing to sustainable To this end, we have audited our own carbon footprint and, the next decade. development over the long term – to do Zero Harm to People using 2019 as a baseline year, for the short term we have offset and Planet and to build a prosperous, purpose-led business our carbon emissions from scope 1, scope 2 and the business We understand that KBR will face increased challenges over that contributes positively to the world we live in. travel category of scope 3. We are developing ambitious the next decade, and for this reason, we must help prepare targets to reduce carbon emissions over the long term, working for rapid changes in key markets, such as energy, and build We see sustainability not only as a necessity but as an towards carbon net-zero in 2030, in line with the Science Based resiliency for responding to global crises, such as pandemic, opportunity. The business is on a journey to integrate Targets initiative. the physical risks that climate change will bring about, and sustainability into everything it does, from becoming a geopolitical instability in the areas where we operate. The 10 fundamental part of the Zero Harm culture, to offering our In 2019, KBR increased its profile in this area, working with large- sustainability pillars have been specifically designed with these clients innovative solutions and opportunities. scale clients and policymakers across the globe to develop challenges in mind. The objective will be to remain agile and strategies for low-carbon economies. This includes investing in resilient and to build a stable business that can withstand and We especially recognize the business has a responsibility to new and innovative technologies; embracing digitalization to persevere through these crises in the long term. mitigate climate change and reduce our own emissions in help clients increase efficiencies and to capture, sequester, and line with the Paris Agreement. reduce carbon outputs; and striving to protect and regenerate natural resources and to deliver maximum social value. Climate change will increasingly influence our physical environment along with the policy and legislation GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 9

Overview

In This Section The starting point is not design; Our Sustainability Journey – 10 A Foundation for the Decade of Action the starting point is sustainability. KBR’s Ten Sustainability Pillars 11 About Us 12 GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 10

Our Sustainability Journey KBR’s Ten Sustainability Pillars About Us

Our Sustainability Journey - a Foundation for the Decade of Action

“Sustainable development is development thatSustainability meets the needs/səˌsteɪ.nəˈbɪl.ə.ti/ of the present (noun) without compromising the ability of future generations to meet their own needs.” Brundtland Report 1987

Figure 1.1 Social and planetary boundaries1

KBR works with industries and governments around the world, providing scientific, We continually strive to develop new technologies and solutions that help our clients meet technological, digital and engineering solutions to solve large and complex challenges. their objectives while at the same time benefiting our planet and people. In all our operations, We do this with the knowledge that while pursuing market growth, there are social and we prioritize the protection of our natural resources, and we use our influence to develop and planetary boundaries — a safe and socially just space in which humanity can thrive — that measure the social value we provide in the communities where we operate. we must observe and respect.

1 Kate Raworth, Doughnut Economics, 2017. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 11

Our Sustainability Journey KBR’s Ten Sustainability Pillars About Us

KBR’s Ten Sustainability Pillars

In 2019, we significantly increased our commitment to sustainable development by putting in place a robust framework to help drive our PLANET PEOPLE positive contributions to the environment, society and how we govern. This framework is represented by our ten Sustainability Pillars.

Each pillar represents our material topics, as identified by our stakeholders (please refer to the Materiality and Stakeholder Inclusiveness sections in Governing with Purpose).

We designed these pillars to deeply embed sustainability into the heart of KBR’s culture and become an inherent part of the KBR Way.

Figure 1.2 KBR’s Sustainability Pillars GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 12

Our Sustainability Journey KBR’s Ten Sustainability Pillars About Us

About Us

KBR delivers science, technology and engineering solutions to governments and companies around the world. KBR employs approximately 28,000 people worldwide with customers in more than 80 countries and operations in 40 countries.

Drawing from its rich 100-year history and culture of innovation and mission focus, KBR creates sustainable value by combining engineering, technical and scientific expertise with its full life cycle capabilities to help our clients meet their most pressing challenges today and into the future. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 13

Our Sustainability Journey KBR’s Ten Sustainability Pillars About Us

Our Products and Services Our Key Markets Our Government Solutions (GS) business segment provides full life cycle support solutions to Our GS business spans from key U.S. government customers, including the U.S. defense, space, aviation, intelligence, and other programs and missions for governments around Department of Defense and NASA, the U.K. government, including the world. KBR has domain expertise across mission-critical, long-duration programs aligned with the U.K. Ministry of Defense, London Metropolitan Police, other U.K. Crown Services, critical priorities of health and human performance, defense modernization and space. and from the Royal Australian Air Force, Navy and Army.

Our Technology Solutions (TS) business segment combines KBR’s sustainability-focused, Our TS operations extend across North America, to Europe, the Middle East and innovative licensed proprietary technologies, equipment and catalyst supply, digital solutions Africa, Australia, and Asia. and associated knowledge-based services into a global business. From our highly aligned advisory and consulting services through scope definition, advanced technologies and project life cycle support, our TS business segment works closely with customers to provide an optimal approach to maximize their return on investment.

In 2020, we announced the transition from the three-segment business model to a two-segment model, featuring our GS and TS businesses. This portfolio shaping demonstrated continued advancement of KBR’s long-term vision. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 14 Governing with Purpose

In This Section Sustainability is not a goal to be Sustainability Oversight 16 Our Sustainability Approach 17 reached but a way of thinking, a Measuring Our Progress 19 Stakeholder Inclusiveness 20 way of being, a principle we must Materiality 22 Principles-based Approach 24 be guided by. Our Behaviors, Mission and Vision 25 KBR and Ethics 27 Giulio Bonazzi Risks and Opportunity Oversight 29 GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 15

Sustainability Our Sustainability Measuring Stakeholder Materiality Principles-based Our Behaviors KBR and Ethics Risks and Opportunity Oversight Approach Our Progress Inclusiveness Approach Oversight

Governing with Purpose

Our Governance principles are aligned with the UN Sustainable Development Goal’s 12, 16 and 17.

KBR’s traditional governance is rooted in achieving long-term value for our stockholders and by the full Board. General Lester Lyles has served as non-executive Chairman of the Board other stakeholders. We pride ourselves on our principles of accountability, stewardship and since May 15, 2019, and as a director since 2007. General Lyles has significant board experience, integrity. KBR’s Board of Directors is responsible for: both at KBR and at other public companies. He has served on every one of our standing Board committees and has in-depth knowledge of KBR’s history and current business. • Our purpose, values and strategy • Economic, environmental and social performance KBR’s Chief Executive Officer is responsible to the Board for the overall management and • Risk oversight functioning of the company. Stuart Bradie has served as our President and CEO since June 2, • Our most important asset — our employees 2014. Mr. Bradie has also served as an executive member of our Board since he was appointed on July 2, 2014. All our current directors are independent except Mr. Bradie, and in practice, To maintain a successful business, our Board oversees the effectiveness of management’s our CEO has been the only executive director at KBR since its inception as an independent policies and decisions, including the execution of its strategies. In doing so, our Board public company. members are expected to act in the best interests of all stakeholders, to be knowledgeable about our businesses, to exercise informed and independent judgment, and to understand In 2019 we continued the work of aligning governance with our social, economic and general economic trends and conditions, as well as trends in corporate governance. environmental efforts by embedding this into our overall business strategy at the board level. The Board is responsible for closely monitoring risks and opportunities in these areas along with Our Board, comprising nine directors, is led by a Chairman of the Board, who is current and emerging enterprise risk management themes. recommended by the Nominating and Corporate Governance Committee and appointed GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 16

Sustainability Oversight KBR Board of Directors Sustainability & Corporate Responsibility Committee

The Sustainability and Corporate Responsibility Committee of our Board of Directors is HSSE VP CEO responsible for broad oversight and review of all sustainability matters, including ensuring COMMS VP KBR has policies and procedures in place to build a safe and resilient business that takes into consideration climate change, social impact, environmental impact, governance and business stability issues. All members of this committee are independent directors. Sustainability Sustainability Culture Shift Global Sustainability Implementation Think Tank Committee & Report Team The Sustainability and Corporate Responsibility Committee meets formally at least twice a year to guide strategy, set performance objectives, monitor implementation and CHAMPIONS performance of objectives, and monitor and oversee progress against goals and targets for addressing our material topics including, cybersecurity (under the purview of our

Audit Committee), climate change, and human rights. RECYCLE/ SUSTAINABLE CLIMATE GOVERNANCE COMMUNITY REUSE TRAVEL CHANGE ENGAGEMENT EFFICIENT SUPPLY HEALTH, SAFETY INCLUSION & RISK KBR established a Global Sustainability Committee in 2019 to align and implement ENERGY PARTNERS & SECURITY DIVERSITY MANAGEMENT sustainability practices at a business level globally. Our CEO chairs this committee, and 10 PILLARS members include business segment and corporate department executives, as well as key Figure 2.1 employees, to ensure well-rounded and in-depth discussions that support the development and implementation of KBR’s sustainability strategies. A sub-committee of this Global Sustainability Committee, the Sustainability Culture One of the key issues the Global Sustainability Committee focuses on is climate change Shift Think Tank, was established in 2019 and is chaired by KBR’s Vice President, HSSE impact. The committee meets several times a quarter, and climate-related issues are typically and Vice President, Global Communications and Marketing. The chairpersons are reviewed every meeting. The committee also takes responsibility for communicating identified responsible for developing the key sustainability messaging and communications for risks and opportunities transparently and clearly to all our stakeholders. embedding sustainability into KBR’s broader culture. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 17

Our Sustainability Approach

At a strategic level, our ten Sustainability Pillars are the foundation for our work supporting the Sustainability Development Goals outlined in the UN’s Decade of Action from 2020 to “...by choosing a path of sustainability, 2030. This calls for “accelerating sustainable solutions to the world’s biggest challenges,” and for us as a business to mobilize for a decade of action in the pursuit of sustainable leaders are taking responsibility for our development (UN Global Compact). shared future – making sure that business plays a key role in solving our world’s Underpinning these pillars is our Global Sustainability Policy, a corporate-level strategy biggest challenges.” that delineates the guiding principles for preserving our planet and advancing society, while also pursuing our business growth and prosperity. UN Global Compact, As a partner to the UN Global Compact, we agree to take intentional and ambitious Shaping a Sustainable Future action aligned with achieving our goals. We understand that each goal is inherently and deeply interconnected, and the actions taken on one goal can support or hinder the achievement of others. Identifying and addressing the interconnectivities between each of these goals helped us develop our ten Sustainability Pillars. Created using a systems- thinking approach, they too should be viewed holistically. Our Global Sustainability Policy provides a roadmap for the commitments and actions under each pillar, with the UN’s Sustainable Development Goals as the ultimate objective. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 18

SOCIAL ENVIRONMENTAL SUSTAINABILITY SUSTAINABILITY

• Training and professional development • Waste minimization and recycling - Skills training • Noise abatement - Mentoring and skills transfer • Air emissions control - Refresher training • Erosion control (Storm Water Pollution • Physical and mental health and safety of Prevention Plan) workforce • Water and wastewater treatment • Fair and ethical labor practices including fair • Water quality management wages, grievance mechanisms, translators, etc. • Habitat health monitoring • Target the use of local suppliers and vendors • Waste minimization and recycle/reuse • Human rights governance • Regeneration/replanting Figure 2.2 • Indigenous community advocacy • Diversity and equal opportunity – indigenous, Approach to Sustainability Management minority, ethnic and women within the Our sustainability principles guide our teams to define and assess social and organization and enterprises in the supply environmental impact for corporate and client-driven projects. The processes are chain process intended to be flexible enough to apply to a broad range of projects and work scopes. • Employment rights and training opportunities We are guided by the general principles of sustainability as outlined above. for indigenous and local peoples • Local community projects - Community relations - National business development GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 19

Measuring Our Progress In everything we do on our sustainability journey, we are transparent and open about the risks we face and equally In everything we do on our sustainability journey, we are transparent and open about the about the opportunities open to us. risks we face and equally about the opportunities open to us. We illustrate the good we do and confront issues where they exist so we can plan to do better where needed. We do this by measuring and reporting on all aspects of our material topics.

To improve transparency in the management of our impacts and to report on our progress, we have invested in a global third-party Sustainability Management software system, designed to collect data from our locations around the world and across our areas of impact. The system will facilitate the timely, accurate and central collection of data to calculate and establish our baseline year, 2019, from which we will benchmark and monitor progress over the coming years.

We have obtained independent verification of our energy and emissions data by a third-party carbon auditor. Please refer to our section on Climate for more detail on our management approach. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 20

Stakeholder Inclusiveness

To inform our sustainability policy and strategy, we conduct ongoing engagement with How we engaged with Topics discussed with external and internal stakeholders through formal and informal channels. These groups investors our investors include our employees, shareholders, clients, suppliers and vendors, governments, joint- venture partners, and local communities and interest groups. Our stakeholders’ input Bi-annually, we invite our largest 25 • Governance and financial performance of drives our sustainability focus, and we organize and adjust our policy and procedures investors to discuss agenda items for the the company around the key topics these groups identify as material. annual meeting, topics to consider for the next • Our executive compensation program, the proxy season and any other items they desire. say an pay proposal and other agenda items for the annual meeting, as well as We regularly report our investors’ say on pay results and actions to be taken views to our Board of Directors, and after our annual meeting. In 2019 we met or initiated our Compensation Committee considers • Sustainability matters these views when developing our executive • Board diversity contact with investors compensation program, and our Sustainability • Recent and upcoming improvments in our representing and Corporate Responsiblity Committee also proxy statement and sustainability report considers these views when reviewing our disclosures sustainability goals and progress.

We engage through quarterly conference calls, our investor relations website and meetings and calls. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 21

STAKEHOLDER FORMS OF ENGAGEMENT

INVESTORS - Earnings Conference Calls Stockholders, financial institutions, potential socially - Annual Meeting of Stockholders responsible investors - Investor Presentations

EMPLOYEES - Ethics Hotline - Zero Harm Day - AIM Performance and Talent The foundation of KBR: all our employees worldwide - KBR Listens Mailbox - SAFE Tours Management Process from project staff to business presidents - Social Media - ASPIRE and IMPACT (KBR’s employee resource groups)

CUSTOMERS - Proposal Requests The companies and governments who rely - Tradeshows on our products and services - Project Close-out Surveys

SUPPLIERS & SUBCONTRACTORS - Supplier Performance Evaluations Parties who provide goods and services to KBR - Pre-inspection Meetings in order to execute our contracts - Shop Surveys

JOINT VENTURE PARTNERS - Joint Venture Board and Committee Meetings Companies KBR agreed to form a business arrangement with to - Project Operation Discussions execute specific projects, sharing resources, cost, risks and profits

GOVERNMENTS - Liaisons with Regulators and Agencies Country governments and government - Audit Discussions organizations around the world

LOCAL COMMUNITIES - Community Events Local citizens and communities located in the areas - Community Meetings and Debriefs where we execute projects, impacted by our work GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 22

Materiality

In 2019, our Global Sustainability Committee and our Sustainability and Corporate Our materiality process included looking at our business strategy through the lens of those ten Responsibility Board Committee reassessed our existing three key areas — Operating topics and how we intend to embed them into our wider business processes and integrate them Responsibly, Operating with Integrity and Caring About People — and widened them into our Zero Harm culture, as outlined in this report. Allowing our stakeholders to influence our to align with ten key topics, identified by our stakeholders, as material to social and material topics has enabled us to focus resources in the areas that are most pressing to our environmental impact. business. These topics form the basis of our sustainability strategy and approach. The process took into consideration the prevailing economic environment and recent Environmental Impact environmental and social policies and regulations influencing our work in key locations. We also considered any international and voluntary agreements that we align with, such as UN declarations and conventions.

Considering these factors, stakeholders were asked how our core competencies can either contribute to or hinder sustainable development.

Significant environmental issues (e.g., climate change, natural resource scarcity, protection of biodiversity, waste) and social issues (e.g., inclusion and diversity, data security, governance, Social Impact and employee health, safety and well-being) were some of the key topics identified as having potential impact and risk on our business and on our ability to create long-term value. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 23

HIGH At the same time, this process has identified parts of our business that are well positioned for taking advantage of market opportunities that sustainability 1 2 challenges offer. For example, by combining our expertise and technology 6 capabilities from parts of the business to develop new solutions and services, Low Impact High Impact we identified openings to new markets and growth opportunities. The most High Interest High Interest ENVIRONMENTAL IMPACTS obvious of these are our experience in energy efficiencies and energy transition CLIMATE CHANGE and our technology and digital solutions. 4 EFFICIENT ENERGY 10 5 SUSTAINABLE TRAVEL The next step was to rank our material topics based on where they lie on the RECYCLE REUSE axis between stakeholder influence and impacts versus environmental and 3 9 SUPPLY CHAIN social risks and impact to the business. SOCIAL IMPACTS Low Impact High Impact HSE From this process, the ten key areas were highlighted and shortlisted as Low Interest Low Interest GOVERNANCE material topics that we will need to manage, monitor and report on. Using this I&D data, we can provide meaningful analysis for identifying where the company is COMMUNITY OUTREACH creating, or reducing, value for society and the environment. LEVEL OF INTEREST AND IMPACT TO STAKEHOLDERS TO AND IMPACT LEVEL OF INTEREST RISK MANAGEMENT

LOW MATERIAL IMPACT ON THE BUSINESS

Figure 2.3 GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 24

“We have only one planet. This fact radically constrains the kinds Principles-based Approach of risks that are appropriate to take at a large scale. Even a risk with a very low probability becomes unacceptable when it affects all of us — there is no reversing mistakes of that magnitude.”

2 KBR takes a principles-based approach to everything it does as a business. All policies and procedures are in line with UN – Nassim Nicholas Taleb declarations and conventions, providing a framework for our corporate responsibility. We have built a culture of integrity and part of this involves upholding responsibility to people and planet and for long-term success. As a partner of the UN Global Compact, we have adhered to their 10 Principles and have aligned our commitments to work towards achieving the Sustainable Development Goals. COR E VA LU Management Approach sustainability policy, its goals and values. As a starting point, E S VE S TI We Value Our People these environmental, social and governance commitments EC Our sustainability vision is underpinned by KBR’s Zero BJ We Deliver O S & E SS G E NT We Are People of Integrity Harm and Courage to Care culture — doing zero harm to are attached to our Executive Leadership Team’s KPIs. At IN C E N O EM R G We Empower N P A A G S L D N T P N N We Are a Team of Teams both a corporate and project level, these pillars will drive us E E the planet and zero harm to all people. A C & M I G Y S E N G C E R I E I I U T T to achieve positive impact and reduce negative impact over T L I S R A O V A O I R P E P T E T P C M S R and above minimum legal requirements. A Our Zero Harm culture has been hugely successful E

Health, Safety & Security O throughout KBR and has led to year-over-year Governance

Inclusion & Diversity P L

improvements in safety. We will emulate this success Precautionary Approach Community Engagement P E

R Risk Management as it relates to sustainability. Just as with the Zero Harm Our Sustainability and Corporate Responsibility Board Prosperity for all stakeholders O Committee takes a precautionary approach to the Employment and Wealth practice, we outline commitments and responsibilities for S Social Value P Recycle/Reuse every KBR employee to apply to their daily lives. important issue of climate change. They acknowledge E Efﬁcient Energy R Sustainable Travel we have a social responsibility to protect the public from IT Y Supply Partners By collecting data on our material topics, we align metrics exposure to harm as a result of our activities, based on the Climate Control and key performance indicators (KPIs) with the wider current scientific evidence that there is plausible risk. T PLANE

Figure 2.4 2 Climate Models and Precautionary Measures, Nassim Nicholas Taleb, et al., Issues in Science and Technology (Summer 2015). GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 25

Our Behaviors, Mission and Vision

Our ONE KBR Behaviors are a set of principles that drive our day-to-day business activities. They are the backbone of our corporate culture and reinforce our mission, vision and values, and ensure our motto. Our mission and values guide us in our purpose to focus on what is important and to progress in economic growth, social inclusion, environmental protection, physical and digital safety, and life conditions. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 26

ONE KBR BEHAVIORS OUR MISSION

We Value Our People and tenacity. We believe doing what’s right for Our mission identifies what we do, why we do it and for whom. Our people are the heart of everything we the planet, the communities where we live and It defines our reason for being: do. We are dedicated to creating diverse work, and our people is good for our business. and inclusive work environments in which We will not sacrifice our integrity. To safely deliver any project, any time, in any environment for the benefit of every member of our team of teams feels our customers, shareholders, employees and the communities we serve. safe, supported, respected, trusted and We Empower valued, and where each person is given We empower all our people with a shared opportunities to grow and reach their full purpose, the right tools and the supportive potential. culture they need to be proactive, to be OUR VISION adaptive to change, and to succeed. We trust We Deliver them to be independent decision-makers who Our vision reminds each of us what we aspire to be as a company We are our clients’ trusted partner. We aren’t afraid to meet any challenge head on and what we should strive for each day: are uncompromising in our commitment and who proudly own their work. to deliver innovative, high-quality, A leading global provider of full life cycle professional services, project delivery technology-led solutions for them, and We Are a Team of Teams and technologies supporting the government services and industrial markets, exceptional sustainable value for all our We have a will to succeed, individually and as creating exceptional value for customers, employees and shareholders. stakeholders, underpinned by strong a company, but we value the achievements commercial and operational discipline. of our team of teams over our individual accomplishments. Our collective focus powers We Are People of Integrity our operational excellence, fuels our passion We are people of character, who value for delivering for our customers, and makes us honesty, trust, courage, fairness, prudence a better, stronger, more effective and efficient company. We are ONE KBR. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 27

KBR and Ethics

Our global emphasis on ethical standards and prevention of corruption and fraud has created a culture of integrity and heightened awareness of ethical behavior and procedures. Our enhanced control environment, awareness and training around ethical behavior, coupled with transparency, help create a low-risk environment for misconduct and reputational risk. Our approach to ethical conduct is considered at the board level and is part of our Enterprise Risk Management processes.

The continued success of our business depends on how we manage the risk that comes with operating globally, which can harm our reputation for being a service provider of integrity. On the next page are some of the procedures we’ve put in place to counter risk and develop a highly ethical workforce. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 28

Mitigating Risk and Developing a Highly Ethical Workforce

• KBR promotes confidential reporting of by Legal Compliance and adhered to by engagement of third parties, provisions of • We periodically review all general ledger any violations of our Code of Business Procurement/Subcontracts, including a business courtesies and donations, and other accounts for facilitating payments, Conduct (COBC) through several robust risk-based third-party due diligence details of our anti-corruption program. compliance-sensitive payments and improper established channels, including KBR’s and approval process. Collectively, our fees. KBR policies and procedures set forth • We only engage third parties (e.g., sales Ethics Hotline, which is managed by a the processes and guidelines for proper agents, business partners and other third • High-risk projects and offices are required third party and allows for anonymous requisitions, commitments, payments and parties that interact with non-U.S. government to complete annual anti-corruption self- reporting. KBR prohibits retaliation in any record keeping. officials on KBR’s behalf) that complete our assessment questionnaires. form for reporting suspected violations of rigorous anti-corruption due diligence review the COBC. All allegations are evaluated • All KBR employees, directors and contractors and approval process. Our contracts with • Employees occupying certain positions of and investigated. are required to complete compulsory these parties include specific anti-corruption substantial authority or critical job functions annual Ethics training, which reinforces KBR’s compliance provisions, and the third parties also complete annual compliance certifications • The Audit Committee of the Board of expectations that employees will conduct are required to certify compliance with the to ensure that the COBC and anti-corruption Directors oversees KBR’s compliance business ethically and in accordance with FCPA and other applicable anti-corruption laws are being adhered to throughout the system and controls, including its Anti- the COBC. In 2019, the Ethics training was laws and we expect the same standard of organization. Corruption Compliance program. The offered in 16 different languages and was compliance from any Joint Venture partners. Chief Compliance Officer, who reports to also provided in classroom settings at • COBC allegations of corruption and fraud, as the General Counsel, has responsibility for remote locations, where they lack online • Our internal audit services team regularly well as allegations involving employees with a implementing and managing our anti- training. We provide additional anti- conducts anti-corruption audits of our projects role in internal controls over financial reporting, corruption program. The Chief corruption training to targeted employee and office locations through a risk-based are reported to the Audit Committee. Compliance Officer reports at least groups. Prior to training, employees certify approach and periodically conducts anti- quarterly to the Audit Committee on any that they understand the COBC and will corruption audits of selected third parties. • We actively monitor and audit our internal significant COBC and corruption-related comply with its provisions. compliance with our COBC via internal controls. compliance matters. • Foreign charitable and community • Our Anti-Corruption Procedure governs contributions undergo an anti-corruption Refer to our Anti-Corruption program for more • Our anti-corruption program procedures the due diligence requirements and review and approval process. information: https://www.kbr.com/sites/default/ and guidelines are owned and published files/2020-05/kbr-anti-corruption-program.pdf GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 29

Risks and Opportunity Oversight

IDENTIFICATION

Enterprise Risk Management (ERM), one of KBR’s Ten Sustainability Pillars, is key to driving KBR The KBR ERM Framework comprises six EVALUATION ASSESSMENT to sustainable business growth. Our resilience, success and continued evolution depends phases: Identification, Assessment, Analysis, on our ability to anticipate and respond to the constantly changing risks in our existing and Mitigation, Monitoring and Evaluation. This future operating environments. ERM addresses, among other aspects, those that relate to the approach delivers visibility of KBR’s changing risk key five areas: profile and enables informed strategy decisions MONITORING ANALYSIS and adjustments, better communications to • Exposure to human rights vulnerabilities in our supply chain stakeholders and a common focus based on consistent and reliable data. We apply all six MITIGATION • Health, security and safety (mental and physical) phases to all material risks and opportunities, • An inclusive and diverse workforce including those related to climate. • Climate-related risks and environmental management risks Figure 2.5 • Data privacy and cybersecurity risks The KBR ERM Framework is a top-down and bottom-up approach and is a consistent, scalable and auditable means for the identification and management of existing and emerging risks and We have a fully integrated enterprise-wide, COSO-based (Committee of Sponsoring opportunities, both internal and external, to KBR’s current and future operations, at project level, Organizations) ERM framework and process, which is actively supported by the Board business unit level and enterprise level. and executive leadership. The framework enhances business resilience by encouraging uncertainty anticipation and resolution at all levels, from project to enterprise, across all KBR’s Executive Leadership Team convenes for dedicated risk and opportunity reviews three business units, globally, in real time. times a year. The outputs are reported to the Board of Directors twice per year, and to individual business units and projects to manage risks, including climate risks and opportunities, on an By entrenching ERM principles and practices in our culture and operations, we can ongoing basis, using the ERM process and tool to provide real time risk-based data. consistently visualize the entire risk landscape, mitigate threats, capitalize on opportunities, and create value and predictable outcomes. Every employee is empowered to identify risks and opportunities, including those related to climate, environmental management, health and safety, and cybersecurity, as well as risks regarding human rights. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 30

Board Advice & Oversight

THE BOARD’S ROLE IN RISK OVERSIGHT ELT Enterprise R&O Enterprise Strategy Risk oversight is an integral part of KBR’s Board of Directors’ role, and discussions regarding risks faced by KBR are deliberated throughout the year. Responsibility for risk management is distributed among the Board as a whole and the individual Board committtees, in each case supported by management. KBR’s enterprise risk management framework provides an effective tool for executive oversight of managing risks. Global BU Leadership BU R&O Business Unit Strategy

Board of Directors Enterprise Risk Management • Reviews semi-annual risks reports including strategic, • Guides all business segments in consistently Programs Projects R&O Projects Strategy operational, financial and hazard risks, as well as implementing KBR’s ERM Policy and Framework management’s assessment of their likelihood and comprising the six stages of risk management: impact, the perceived trend for each risks (whether indentification, assessment, analysis, mitigation, increasing, decreasing or stable), and the measures monitoring and evaluation. Figure 2.6, ERM Process Flow Chart being taken to monitor and manage those risks. • Reports periodically to the Board on KBR’s • Reviews legal and compliance risks and approves changing risk profile, enabling risk-based strategy project prospects exceeding a certain amount of decisions and improved communications expected revenues and merger and acquisiton to stakeholders. KBR’s ERM Policy mandates that every risk and opportunity has an owner assigned prospects after deliberating related commercial, and accountable for the ongoing management, including the development and legal and financial risks, agreement terms and implementation of mitigation plans, each with individual owners accountable for integration process. action implementation through to successful conclusion. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 31

Climate-related Risks and Opportunities As we lay the foundation for a decade of change, the Board will continue to take ownership “Let us take advantage of the of climate change risk management, integrating broader stakeholder input as part of the wider sustainability risk management philosophy. This will, in turn, align with the Taskforce opportunities presented by climate on Climate-Related Financial Disclosure (TCFD) requirements and recommendation that action and lay the foundations for a more “all relevant functions, departments, and experts are involved in the integration of climate- prosperous and secure future for all.” related risks into the company’s risk management processes and ongoing management of climate-related risks.” United Nations Foundation In the meantime, in 2019, our Executive Leadership Team identified significant risks and opportunities to the business arising from climate change.

Corporate Environmental, Social and Governance (ESG) Enterprise Risk assessment has shown that changes in government policy, increased connectivity, social activism and shifts in the energy mix may contribute to KBR being viewed less favorably by the markets due to our history in more traditional energy markets. As a response to this, and to more recent and predicated future shifts in the energy market, we have pivoted our business strategy towards new and emerging markets. We have reorganized our business structure to reflect this change, which allows us the flexibility to invest in technologies and acquisitions to continue developing cutting-edge clean and green solutions for our clients in response to climate change. One such opportunity is our positioning in the market for energy transition. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 32

Planet

In This Section Environmental Impact 34 The greatest threat to our planet Managing Environmental Risk 36 Our Environmental Management 37 is the belief that someone else will Approach in Action Environmental Services 40 save it. Technology Solutions that Drive Sustainability 41 for our Clients Robert Swan OBE Energy Transition: Harnessing Opportunity 42 Climate Change: Mitigation and Adaptation 47 Managing our Carbon Footprint 48 Climate Action Plan 49 GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 33

Environmental Managing Our Environmental Management Environmental Technology Solutions that Drive Energy Transition: Climate Change: Managing our Climate Impact Environmental Risk Approach in Action Services Sustainability for Our Clients Harnessing Opportunity Mitigation & Adaptation Carbon Footprint Action Plan

Planet

We protect and regenerate the environment through “We don’t have plan B because there our focus on key three areas: is no planet B.” • We own our footprint • We deliver our projects consciously Former United Nations Secretary-General • We innovate sustainable solutions for our clients Ban Ki-moon GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 34

Environmental Impact The KBR IMS conforms to the requirements of ISO 9001, ISO 14001 and ISO 45001.

Our Environmental Strategy Our management approach to environmental impact is guided by company-issued policies Our five environmental Sustainability Pillars provide an enterprise-wide strategy for how we and flows down to the procedures listed in our IMS Work Methods. As such, the approach manage and govern all KBR’s activities and services, both corporate and project based, performs the task of a dedicated Environmental Management System. to ensure they are designed and conducted to maximize positive sustainable impact and minimize any negative impact on the environment. The procedures for environmental management outline the commitments, expectations and responsibilities for each employee and project team, in addition to the actions and processes necessary for meeting identified targets and objectives for each area of the environment. They relate to and are consistent with the intent of our environmental corporate policy.

Depending on the size of the project, we will either assign an environmental manager, or in the case of our mega projects, we will assign a full complement of environmental staff, including an environmental supervisor and manager, to handle various programs as outlined in the environmental management procedures within the KBR IMS.

The first task of this team is to identify all environmental impacts associated with KBR activities KBR’s company-wide policies and procedures related to environmental impact and to ensure they are assessed and managed at an exceptional level. management support this strategic framework and guide our work. These policies and procedures sit within our Integrated Management System (IMS).

KBR’s IMS is designed to incorporate all segments of the business into one coherent system, to optimize business execution and deliver excellence. It is managed, reviewed and updated by our Executive Leadership Team regularly throughout the year. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 35

The procedural manuals outline each of the methods used for this systematic identification of environmental aspects and their associated impacts, assessment of Waste and environmental impacts, and where necessary, identification of objectives and targets. The Byproducts Emissions assessment includes detailed reviews at each stage of the project and results are recorded to Air in the project’s Environmental Aspects Register. Protection of Identify Habitat and The managers will be responsible for identifying, recording and escalating violations Biodiversity for resolution and for training the environmental team, along with all personnel on the Analyze Evaluate project site, in relevant environmental management aspects. They measure and monitor Record all environmental impacts, reporting and recording all aspects. Emissions Environmental to Water Impacts Environmental managers are responsible for ensuring each project and its Determine Risk Treatment Use of Raw environmental management team perform the following for each category: Strategies Materials and Natural Resources

Release to Land Energy Consumption

Figure 3.1 GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 36

Managing Environmental Risk KBR is ISO 14001:2015 certified by the To enhance these procedures, the Environmental Aspects Identification (ENVID) is used in conjunction with the procedures shown in Figure 3.1 on the previous page and is undertaken to meet the requirements of ISO 14001. Lloyd’s Register Quality Assurance at the Global level, as well as at the The objective of the ENVID is to determine and re-evaluate the risks and potential impacts on the environment of a new or business unit and office location level, modified design or facility, and to identify practicable methods to ensure minimum harm to the environment throughout the life of the project. across Europe, the Middle East and Africa, Asia-Pacific and the Americas. The Environmental Aspects Register and the ENVID Report establish compliance with ISO 14001:2015 as well as for internal and external auditing. These procedures apply to all global KBR offices and projects.

ENVIRONMENTAL SCOPE OF TOPICS KBR commissioned projects are all certified to third-party, multi-attribute sustainability standards, such as LEED , BREEAM, ISCA and other equivalent national standards in compliance with our ISO 14001 certification.

In addition to the above procedures KBR’s Environmental Reference Manual is designed to present information and rules for preventing occupational injuries while executing projects in accordance with KBR’s Behaviors, Mission and Vision. The document comprises two parts:

1. Environmental Compliance • Chemical Inventories Management 2. Environmental Guidance • Hazardous, Industrial and Solid Waste Management • Environmental Reporting and Records Retention • Environmental management plans • Water Quality Management • Training Requirements • Environmental Sampling, Testing and Analysis • Storm Water, Erosion and Sediment Management • Management of External Inspections, Assessments or • Waste Management Plan Guidance • Air Emissions Management Audits • Storage Tanks: Aboveground and Underground • Environmental Surveys Performed Prior to Project Startup Environment managers and teams are also required to refer Management and in Preparation for Project Close-out to the best available techniques (BAT) assessment included in • Polychlorinated biphenyls (PCBs) Management • Spill Prevention, Response and Notification Management the IMS. This is a design procedure that provides an integrated, • Wetlands Protection GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 37

systematic approach to environmental protection and is therefore central to the control of pollution, wastes, and the efficient use of materials and energy. The procedure is “The environment is where we based on the concept of Integrated Pollution Prevention and Control (IPPC), which is designed to provide a holistic approach to environmental protection, including health all meet; where we all have a and the natural environment. mutual interest; it is the one thing all of us share.” As part of our ISO 14001, we perform external and internal environmental audits and regular environmental training programs for employees. We have also developed corrective actions to foster continual improvement and monitor performance records Lady Bird Johnson to ensure we are meeting our defined environmental objectives and targets.

OUR ENVIRONMENTAL MANAGEMENT APPROACH IN ACTION In some regions, we have pioneered more ambitious and targeted approaches to amplify our environmental and social value, both in the local communities in which we operate and on a broader social level. For example, in Australia, our people have developed an Environmental Discipline team of 40 specialists that provides sustainable engineering services. See our APAC case studies on the next two pages for further details.

Government Solutions EMEA has created a Social Value Team that measures the financial value of our social and environmental impact in local communities and in general. View a case study on social Value in the Prosperity section of this report.

These teams rarely work in isolation but rather are part of KBR’s larger service offering for projects including major infrastructure where KBR is providing design and consulting services. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 38

Our Environmental Management Approach in Action

Case Study

PROJECT OUTCOMES As part of the North Western Program Alliance in Australia (NWPA), KBR has been Reservoir Train Station a key participant in one the largest rail infrastructure projects in the state of • Awarded a Five Star Design Delivers Sustainability Victoria’s history. The NWPA has followed a Sustainability Strategic Plan to deliver Rating from the Green Building in areas of greatest influence and benefit while eliminating 75 level crossings Council of Australia. certifying the design as Australian Excellence (intersections where railways cross a road or similar path) across metropolitan Benefits in Design and beyond best practice. Melbourne by 2025, in addition to delivering network upgrades such as stations, • Partnered with the University of track duplication and train stabling yards. Melbourne and Sustainability Victoria to run a trial using recycled glass in concrete. • Designed the first ever station One of these upgrades was the High Street–Reservoir Station Project, an in Victoria to include remote additional works package for which the scope of work included: metering of energy and water, • Demolition of the existing Reservoir Station and construction of a new station which will enable MTM (Metro Trains Melbourne) to monitor • Works including construction of railway track infrastructure associated with and minimize consumption. the grade separated crossing • Logged a 90% overall reduction • Modification to existing shared paths, footpaths and signalized pedestrian in water use across infrastructure crossings life cycle. • Urban design and public realm works in accordance with the Urban Design • 20% reduction in greenhouse Guidelines gas (GHG) emissions from material reductions. • Enhanced local ecology by planting native plants. The objective was to achieve a sustainability certification from the Green Building • Facilitated a 50% reduction in Council of Australia by minimizing energy consumption, responding to climate life cycle GHG emissions. change risks, and using recycled materials. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 39

Our Environmental Management Approach in Action

Case Study

Also in conjunction with the NWPA, KBR helped deliver the Buckley Street PROJECT OUTCOMES Australia’s Buckley Street Underpass, which separated Buckley Street from the Craigieburn railway line. • Awarded a Leading Underpass Achieves Infrastructure Sustainability Rating from the Infrastructure Leading Infrastructure Sustainability Council of Australia (ISCA). Sustainability The scope of work included: • Robust climate change risk • A road underpass under the Craigieburn Line at Buckley Street, including assessment results in the Certification high-specification architectural pre-cast panels incorporation of a number of • Road works relating to the road underpass, Rose Street and Russell Street relevant adaptation measures into the design. • At grade service roads, east and west of the Craigieburn Line • Implemented a comprehensive • Upgrade of three existing pedestrian underpasses at Essendon Station urban design, highlighted by the high-quality interpretation of the heritage station precinct. • 37% reduction in GHG emissions across the project’s construction Project objectives included: and operation, through widespread application of high- • Improved urban design and community connectivity efficiency LED lighting. • Reduced construction and operations emissions • Diverted 100% spoil, • Adaptation to climate change risks 97% construction waste and 65% office waste by volume from landfill. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 40

Environmental Services recycling and water treatment. Our capital delivery and asset • Environmental Engineering – Stormwater management Water Infrastructure management solutions provide water safely and reliably to and pollution reduction, erosion and sediment control, and Water is a resource that’s vital to the environment and all communities of all sizes. water-sensitive urban design industries. Fresh water is fast becoming dangerously scarce. • Sustainability – Focusing on energy efficiency, recycled According to the UN, a quarter of the world’s population KBR’s Environmental Management Solutions materials and circularity, renewable energy and water is now using water much faster than natural sources can We provide infrastructure planning and natural resource efficiency consulting, with the key responsibility of acquiring be replenished. Though it covers more than 70% of Earth’s management for our clients via a multidisciplinary approach sustainability accreditations and certifications surface, it is an extremely valuable commodity. We provide that comprises environmental science, engineering design, • Environmental Assessment and Planning Approvals access to water for populations all over the world through planning and community engagement. • Water Management – Surface and groundwater quality our critical infrastructure. assessment and management, including coastal waters By considering both environmental and social factors, we are • Ecology – Delivering flora and fauna assessments Whether providing drinking water or supporting agricultural better positioned to deliver projects that avoid or mitigate • Spatial Services – Includes web geographic information or industrial needs, KBR delivers critical water and harmful impacts and leave a positive legacy in the surrounding system platforms for projects and stakeholders and mobile wastewater treatment, networks and management. region. data capture solutions

The work we do on some of the most advanced water Sustainable Engineering Solutions – Australia Clients include: treatment facilities, pipelines and infrastructure in the world Through Infrastructure Services Australia, KBR has developed • State government-led infrastructure, including rail and carries water to our communities. Using our latest proprietary a unique environmental discipline, providing sustainable other transport projects software tools and our engineering procurement and engineering services through a team of 40 specialists divided • Infrastructure operators construction capabilities, we work to increase capacity and into the following sub-teams: • Australian Defence Force improve the quality and efficiency for desalinization, water • Local government and councils • Resource companies through direct consulting GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 41

Technology Solutions that Drive Sustainability for our Clients Olefins We possess an unrivaled combination of existing and newly developed technology solutions, in-house K-PRO™: This environmentally friendly catalyst produces expertise, and strong partnerships that solidifies our position as a leader in energy transition. polymer-grade propylene with significantly reduced NOx and CO2 emissions. Our energy-efficient and sustainable process technologies include the following. Syngas • Ammonia technology Refining global demand for motor fuels that comply with strict • Green ammonia (KBR K-GreeN™) • KBR ROSE® Residue Upgrade Solution: Our ROSE specifications on sulfur, benzene, olefins and total aromatics • Blue ammonia technology recovers higher volumes of the cleanest content in gasoline. possible deasphalted oil from residue streams than Ammonia 6000 conventional solvent deasphalting technologies. It is • KBR K-SAAT™ Solid Acid Alkylation Technology: KBR K-SAAT KBR’s proprietary ammonia process exhibits a proven low also highly efficient, requiring up to 60% less energy maximizes the yield of motor fuels and enhances production energy consumption of just 6.27 Gcal/MT that can’t be than other technologies due to its use of supercritical of alkylate, an ultra-clean blendstock, by reducing the matched by other technologies of this kind. Our ammonia solvent recovery and specially designed heat recovery production of heavy hydrocarbon byproducts. process also guarantees safety, as it does not use a exchangers. hazardous oxygen-fired ATR. • KBR VCC™ Veba Combi-Cracking: This hydrocracking • KBR MAX-ISOM™ Isomerization Technology: KBR process converts petroleum residues at very high conversion K-GreeN introduced MAX-ISOM as the technology of choice rates (greater than 95%) and liquid yields (above 100 vol%) KBR K-Green™: Our green ammonia process produces for low-cost production of high-octane, cleaner into directly marketable products. ammonia with no GHG emissions. The sun, air and water burning isomerate to accommodate the rise of the provide the power and elements to create this versatile source of energy, nutrition and chemical feedstock. Green ammonia offers a flexible way to store energy and transport it for use either as energy or feedstock. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 42

Energy Transition: Harnessing Opportunity

Over the past decade, we have witnessed a paradigm shift in the energy market, and 2019 Our thought leadership in new and sustainable energy trends involves evaluating and designing may have marked a significant turning point in energy transition. Historically, there have solutions focused on green ammonia, renewables, blue and green hydrogen, gas monetization, been several phases of the energy transition: carbon capture and sequestration, helium removal, International Marine Organization (IMO) 2020 marine fuel, and green methanol. Our own technology portfolio continues to expand and 1. Coal overtakes biofuels in 1900 and powers the Industrial Revolution. differentiate, offering clients unique and innovative solutions in their moves toward cleaner, 2. Oil replaces coal as the dominant fuel. greener operations and solutions. Refer to our Technology Solutions listing . 3. Liquid gas becomes a perceived cleaner source of energy. 4. The next phase of the transition is taking place now and KBR is positioned In our work evaluating and designing low-carbon solutions, we focus strongly on blue and to play a central role. green ammonia as a vector for hydrogen and as a means for assisting the transition to net-zero economies.

KBR’s Role in Energy Transition Hydrogen creates storage solutions for excess renewable energy flows and can help balance For the past several years, global industries and governments have been investigating low- electrical grids, along with decarbonizing heating/cooling and transportation sectors. Ammonia carbon solutions on a mass scale. In 2019, we capitalized on this opportunity and began can be used to transport hydrogen more efficiently and effectively. The aim is to transition, over working with a growing number of countries and companies to develop roadmaps and time, from blue to green ammonia derived from renewables and to facilitate green hydrogen strategies for building low-carbon economies with an emphasis on hydrogen, as well as production, preferably via a decentralized distribution model and using legacy liquefied natural other energy efficiencies and carbon capture and storage solutions. Refer to our Singapore gas (LNG) infrastructure, thereby reducing capital expenditure. The forecast is for exponential case study later in this section. demand in green hydrogen as more governments and industries seek to implement their net- zero strategies over the next decade, in line with the 2015 Paris Agreement. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 43

KBR’s opportunity in the market starts with our advisory services and moves through the planning phases into front-end engineering design and building then to licensing our proprietary technology solutions and commissioning and industrial services.

The growth of ammonia as an energy-efficient vector for hydrogen is key to this progression for KBR. Why?

Because more than 50% of the world’s ammonia has been produced using KBR’s ammonia technology, including 38 new major ammonia plants since 2000. Since 1950, KBR has licensed 242 grassroots ammonia plants. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 44

Ammonia Market Growth: From Grey to Blue to Green AMMONIA PRODUCTION / FWH-YR KBR holds a strong strategic position and advantage in energy transition, thanks to our extensive experience in ammonia technology and production, our electrolysis capabilities, and our solid background and leadership in hydrogen handling and storage through our work with the NASA Space Task Group.

For many years now, our Government Solutions teams have been leading government- to-government projects, and we have built trusted working relationships with some of the key nations supporting the hydrogen clean energy movement, including Japan, the United Kingdom, Australia, Singapore, nations in the Middle East and the United States. These trusted partnerships are mirrored by our working relationships and experience with major energy companies who will be key in the transition.

This, combined with our experience in large-scale operations in remote locations and our excellence in mission control, will enable KBR to take a lead role in transitioning the world to greener and cleaner energy.

Figure 3.2 GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 45

Energy Transition: Working with Our Clients and Partners to Harnessing Opportunity Drive the Climate Agenda Case Study

KBR partnered with Argus Media to assess the technical and economic feasibility PROJECT OUTCOMES of importing and deploying hydrogen in Singapore up to 2050. Climate An Existential • Engaged over 150 global stakeholders change represents an existential challenge for the low-lying island state, which (government and private) to participate in Challenge for is particularly vulnerable due to its limited alternative energy options. As the the study. Singapore world transitions to a carbon-constrained energy future, Singapore must meet the challenges of decarbonizing all sectors while ensuring a clean, reliable and • Identified more than 100 suitable technologies across the hydrogen value affordable energy supply. Singapore is therefore looking toward emerging low- chain that will benefit the acceleration of carbon technologies, including hydrogen, as a potential solution to improve the Singapore’s potential hydrogen economy long-term security and sustainability of its energy supply. • Identified key opportunities for Singapore to economically decarbonize its economy and become a world leader in areas of KBR’s study assessed the potential sources of hydrogen imports to Singapore, hydrogen deployment. suitable downstream applications of imported hydrogen, R&D opportunities • Discovered potential hydrogen to advance hydrogen technologies, and recommended solutions to address deployment could theoretically contribute hydrogen-related policy and regulatory challenges. to Long-term Low-Emissions Development Strategy target by between 14 and 70%.

The main study objectives were to: • Produced a dynamic economic modeling tool for continued use by the Prime • Assess potential sources of hydrogen imports to Singapore based on Minister’s Office of Singapore as they refine availability, cost, technical feasibility and supply security. their decarbonization strategies. • Assess scope and scale of downstream applications of imported hydrogen in Singapore based on technical feasibility and economic, climate and • Prepared a public report of study results for stakeholders. environmental benefits. • Evaluate feasibility and gaps in Singapore’s existing infrastructure (e.g., LNG, • Facilitated strategic discussions for natural gas, town gas) to receive/unload, store, transmit and transport government to business, G2B and business hydrogen domestically for downstream applications. to business on specific hydrogen-related collaborations, risks and opportunities. • Assess and recommend solutions to address the technology, policy and regulatory challenges to the import and use of hydrogen GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 46

Energy Transition: Harnessing Opportunity

Case Study

Hyundai Oilbank awarded the study to KBR in Q1 2015. The study scope was to increase PROJECT OUTCOMES A study to enable the refiner’s heavy oil upgrading capabilities. The refinery was limited in the crude oil types that could be processed and the study scope was to evaluate implementation plant-wide processing of KBR’s ROSE technology to reduce or eliminate the amount of high sulfur fuel oil • Implementation of the selected product (IMO2020 Objective). The ROSE unit provides additional benefit by recovering configuration enabled the refiner and thermal efficiency the paraffinic components in the residue streams that would enhance operation of the to process heavier crude while improvements with downstream units: ARDS unit (improved catalyst life, reduced Hydrogen consumption) eliminating the production of and RFCC unit (improved yields). The energy efficiency of the ROSE unit minimizes the high sulfur fuel oil. KBR Rose® Technology impact on the climate compared to alternative solutions such as conventional solvent deasphalting (SDA) units and visbreakers that are energy intensive. • The ROSE unit provides a 40- 50% increase in energy efficiency over competing technologies Improvements resulting from implementation of the ROSE unit were as follows: such as conventional SDAs and a) Minimize or eliminate fuel oil make compared to alternative configurations visbreakers. b) Reduced hydrogen consumption c) Significant increase in catalyst life by removal of asphaltenes from ARDS feed d) Flexibility to process heavier crude e) Conversion units filled to capacity with higher quality products resulting from heavier crudes Several different configurations were evaluated to determine the scheme that optimized the above improvements. The most economically favourable option was progressed to the engineering stage.

IMPACT The largest ever ROSE unit, with a design capacity of 80,000 barrels per stream day, at Hyundai Oil Bank (HDO) started up in 2018. Implementation of KBR ROSE technology enabled the refiner to process heavier crude while eliminating the production of high sulfur fuel oil full stop Managing Our Carbon Footprint

GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 47

Climate Change: Mitigation and Adaptation

Climate change is one of the biggest threats facing our planet. We recognize the science behind climate change and the ”rapid, far-reaching and unprecedented” changes in all aspects of society that the Intergovernmental Panel on Climate Change (IPCC) recommends are needed to limit global warming in line with the 2015 Paris Agreement. We understand this would create clear benefits for people and natural ecosystems and help ensure a more sustainable and equitable society.

Our Sustainability Committee has made climate change, identified as a key material topic by our stakeholders, one of KBR’s top strategic business issues. Though it is one of our five environmental Sustainability Pillars, outcomes from each of the other four pillars contribute to our impact on climate change. See Figure 3.3.

Increased global prioritization of the current energy industry’s potential impacts and contribution to climate disruption have led to an increased focus on elements of our business Figure 3.3 that will contribute to helping our clients solve the issues they face in this area. Climate change is more than just one of the 17 SDGs specified in the 2030 Agenda for Sustainable Development. It is a threat multiplier with the potential to worsen some of humanity’s greatest challenges, including health, poverty and hunger. United Nations Framework Convention on Climate Change, July 2019 GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 48

Managing Our Carbon Footprint

We are committed to continually improving our energy efficiency and procuring OUR CARBON FOOTPRINT clean energy where possible. We commissioned a third-party carbon consultant, ClimatePartner, to calculate our emissions and provide an overview of the CO2 emissions generated by our business activities across our 101 sites, including heating and vehicles Heating (scope 1), electricity (scope 2) as well as business travel (air and rail travel) (scope 3 – Cooling Train travel 2.73% Scope 1 category 6). 0.34% 0.02% 3.77% Vehicles The audit followed the methodology as set out by the Greenhouse Gas Protocol of the 0.70% World Resources Institute and the World Business Council for Sustainable Development. Electricity We have calculated and disclosed here the GHG emissions associated primarily with our 30.14% Scope 2 own sites’ energy usage. 30.14% Air travel Scope 3 In the short term, we are using the carbon footprint to inform our offset program for 2019. 66.09% We offset our 2019 emissions to become a carbon neutral company. This is also a means 66.07% for getting us started with our longer-term climate action strategy. The 2019 carbon footprint has helped us to identify carbon emission hotspots and enabled us to set carbon reduction targets defining our climate action goals for 2020 and onwards. EMISSIONS PER EMISSIONS PER CATEGORY SCOPE Please see our Climate Action Plan section on the next page for information on our initial plans and next steps based on the carbon footprint findings. Figure 3.4 GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 49

CLIMATE ACTION PLAN 2020 Carbon Neutral by 2019-Offset Programs

Short term: TOTAL (T CO ) Our offset program will be: • Develop a Sustainable Business Travel policy 2 • Implement ISO 14001 for our own buildings Clean Wind Projects • LEED /ISCA/BREEAM certification and green energy procurement strategy for owned 114,840 2.5% Oceans 97.5% (India) facilities and offices

Climate Plan This amount corresponds to... • Set a science-based target for our long-term Climate Action Plan • Commit to net-zero by 2030 based on the above. • Consider and expand scope 3 categories, calculate time needed to reduce emissions and the amount of carbon that cannot be avoided to offset. • Announce a net-zero strategy only once we have accurate and verified data to be able to meet genuine net-zero carbon status by 2030.

...the melting of ...the annual CO2 ...the amount of CO2 362,162 m2 footprint of sequestered by Arctic ice in the 14,368 9,657,840 summertime European citizens beech trees per year GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 50

People

In This Section Sustainable development requires Building Our Reputation as a Great Place to Work 52 Creating the Conditions for People to Flourish 53 human ingenuity. People are the most Committing to the Safety of Our People 53 Management Approach to Health and Safety 54 important resource. Data and Information Security 60 An Inclusive and Diverse Workforce 66 Dan Shechtman Capitalizing on Capability 69 Training and Development 69 One Ocean – Developing a Talent Pipeline 72 GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 51

Building Our Reputation Creating Conditions Commiting to the Data and Information Safety and Quality An Inclusive and Capitalizing on One Ocean - Developing as a Great Place to Work for People to Flourish Safety of Our People Security Diverse Workforce Capability a Talent Pipeline

People

Through our social impact pillars and people strategy, we align our work with 1, 3, 4, 5, 8 and 10 Sustainable Development Goals of the UN. As our first ONE KBR Behavior says, our people are the heart of everything we do. They are our most valuable resource, which is why we are committed to creating diverse and inclusive work environments where everyone feels safe, trusted, supported and valued, and to providing opportunities to help our people grow and reach their full potential.

Our focus on people goes hand in hand with our commitment to sustainability, which we can improve by focusing on three key areas:

1. Building our reputation as a great place to work 2. Creating conditions for people to flourish 3. Capitalizing on capability GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 52

Building Our Reputation as a Great Place to Work

Our mission is to become a global employer of choice. We offer fulfilling career opportunities and benefits to attract and retain the best people and empower those people to work in ways that work for them. This includes enabling flexible, customer-facing, digitally connected ways of working, and utilizing adaptable and traditional organizations to deliver the solutions of the future while achieving strategic outcomes.

Benefits Our benefits package is designed to put our people’s health and well-being at the center of how we operate. We believe we have a duty to invest in our employees’ health and in their future. Our benefits are available to full-time and part-time employees and include:

• Opportunities to earn a $600 health insurance premium credit • On-site dietitian, providing nutrition counselling, cooking and lifestyle classes • On-site health screenings • Minimum 40 hours of paternal leave for birth, adoption and placement of a child, • On-site mammograms in addition to other time off for our U.S. employees • Maternity and surgery support program • We have an employee stock purchase plan (ESPP) available to all full-time, part- • On-site flu shots time, and contractors who currently work in the U.S., U.K., Australia or Canada. • Advocacy services Employees can purchase KBR stock at a 5% discount during two enrollment • Weight loss and fitness program periods each year. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 53

Providing Flexible Ways of Working Grievance Mechanisms Moving from a traditional organization to an agile, flexible organization is an opportunity KBR values and encourages employee input and prohibits retaliation in any form for employees to create an equitable and healthy working environment. Having a flexible and family- reporting, in good faith, suspected violations of the Code of Business Conduct (COBC). To that friendly environment for our workforce is crucial for attracting and retaining quality talent. end, KBR uses EthicsPoint, an independent company specializing in the handling of confidential and anonymous reporting of workplace and ethical issues and concerns. Workplace flexibility gives us the opportunity to rethink how our people, our workplace and our supporting technology fit together — to challenge traditional mindsets, management Employees are informed about grievance processes on our website, on the KBR intranet, in their styles, work practices and workplace design. Flexibility is not a “nice to have” — it is critical COBC training, and in their induction training and KBR starter packs. to workplace satisfaction and productivity. For this reason, we offer benefits that specifically support a work/life balance, including: Other channels available to KBR employees to voice grievances for any matter include: • KBR Listens – monitored mailbox and email • Flexible scheduling • The Employee Support Program – via chat, phone and email • Remote working • Human Resource support • Part-time working • Manager or business leaders • Parental leave (U.K., EMEA, U.S. variations) • Employee Resource Groups

In addition to these benefits, we provide generous time-off programs to accommodate family and personal needs. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 54

Creating Conditions for People to Flourish

We are creating an inclusive culture, centered on our employees’ experiences and perspectives and with a deliberate focus on mental well-being, to help our people achieve peak performance. We recognize that mental health and well-being affect everyone. Building on our absolute commitment to Zero Harm, we aim to create work environments where employees can thrive, and to inspire and enable our employees to proactively improve their own mental fitness.

Committing to the Safety of Our People As a company, we believe that zero workplace incidents is an achievable goal.

We commit to a Zero Harm policy and approach to safety for our employees and those we work with, including subcontractors, suppliers, partners and visitors. Our commitment to health, safety, security and environment (HSSE) has resulted in unprecedented safety performance throughout the organization and across our global footprint. KBR’s journey to Zero Harm is driven by our employees’ commitment to safety 24/7.

To achieve that goal, we use our internationally recognized transactional HSSE management systems and transformational leadership. KBR’s transactional HSSE management systems are ISO 14001 and OHSA 18001 certified. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 55

MANAGEMENT APPROACH TO HEALTH AND SAFETY Our success depends on our ability to continually improve the quality of the services we provide, while also protecting the health, safety and security of those working directly and indirectly for the company and minimizing the effects to the environment. This commitment is in the best interests of all our stakeholders and the communities where we live and work.

Our HSSE policy applies to all KBR employees and KBR subcontractors globally and identifies and outlines our overarching HSSE principles.

KBR requires active commitment and accountability toward HSSE from all employees and contractors. Line management has a leadership role in communication, implementation, and compliance of the HSSE policy and procedures.

At KBR, we are committed to: The above commitments are in addition to KBR’s basic Zero Harm and Security • Protecting and improving the health, safety, and security obligation to comply with all applicable laws and regulations To support our global mission of providing safe and secure of our employees and contractors at all times. where we operate. environments for all KBR employees, contractors and visitors, • Eliminating incidents through our Zero Harm culture. preventive measures are put in place to reduce risk, such as • Meeting specified customer requirements and ensuring Zero Harm and the Courage to Care locating offices in safe areas and providing appropriate office continuous customer satisfaction. With extensive health and safety training, individuals security based on risk assessments. KBR uses physical security • Setting HSSE objectives, measuring results, and assessing develop a high level of awareness and alertness. To fortify measures — such as perimeter fencing, gated parking areas, and continually improving processes and services our Zero Harm philosophy, we deliberately foster a culture security lighting, card access-controlled facilities and active through the use of an effective management system. of caring for our fellow workers using our Courage to Care security programs — and a robust virtual security awareness • Minimizing our impact on the environment through Conversation procedures. Employees are encouraged to look program to provide a sound foundation for the security and pollution prevention, reduction of natural resource out for their fellow workers by intervening via a Courage to safety of our teams. consumption and emissions, and the reduction and Care Conversation when observing at-risk behaviors and/ recycling of wastes. or to identify signs that a colleague is not coping or thriving. Travel destinations and venues are reviewed to support those • Applying technical skills to all HSSE aspects of Conversations are recorded on the move via mobile app, traveling within the organization, and transportation services and engineering and design. through SharePoint or via paper cards. These conversations accommodations are vetted on a continuous basis. KBR also uses • Communicating openly with stakeholders and ensuring are measured, recognized and rewarded. We use this data to an online 24/7 travel safety advisory system with monitoring that an understanding of the HSSE policy, program and identify trends and alter campaigns accordingly. includes location alerts and emergency communications. procedures. • Recognizing outstanding HSSE performance. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 56

KBR deployed a more robust global mass We have developed a unique approach to mental Our mental health and well-being initiatives will communications system during 2019 that enables KBR health and well-being that combines the skills, focus on the reaching these targets: to immediately communicate with employees in a crisis knowledge and processes of the Health, Safety, Security or urgent situation, such as a weather or active shooter and Environment (HSSE) team with those of the Human event, via email, text or mobile phone. Also in 2019, KBR Resources team, all supported by a global committee Create a positive • Raise awareness and supportive • Encourage conversations decided to return to International SOS as its worldwide with representatives from key corporate functions, workplace culture • Demonstrate visible leadership travel medical and security assistance provider due to including marketing and communications and legal. In program enhancements. 2020 we plan to replicate the success of the Zero Harm campaign for mental health and well-being. The International SOS program is designed to keep Provide employees • Offer range of tools and training with competence • Empower to measure and KBR employees healthy, safe and secure while traveling and confidence to monitor fitness abroad. Employees can connect to International SOS improve their fitness • Signpost support for those in need doctors and security teams via phone call, email or smartphone app 24 hours a day, 365 days a year, all over the world. Depending on the situation, International OUR PERFORMANCE Enable managers • Communicate manager’s role Thriving people are SOS can get in touch with KBR’s HSSE team and Global to spot early • Build knowledge and confidence resilient, productive Mobility team and can even communicate with family signs and signpost • Reinforce “put your own and innovative members in emergency situations. support mask on first”

Zero Harm and Mental Health and Well-being OUR Prevent mental • Establish key features of We balance the importance we place on physical OUR REPUTATION RESPONSIBILITY ill health being “good work” health with that of mental health and well-being. This It matters to Good work caused, or • Promote work-life balance holistic approach plays a critical role in KBR’s safety employees, contributes to mental worsened, by work • Facilitate ﬂexible working performance. We provide the necessary training, tools customers and well-being, and vice versa and resources for employees to be able to perform shareholders their tasks at a peak mental and physical state. Establish • Understand employee experience mechanisms for • Determine appropriate metrics measuring • Consider goals and targets improvement GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 57

HEALTH SAFETY AND SECURITY

in KBR’s 2018–2019 Global KBR’s global TRIR is calculated by multiplying the number of recordable incidents by 200,000 37% Total Recordable Incident Rate (TRIR) and dividing that number by the total of labor hours worked in the year. REDUCTION 2019 KBR Work Hours 2019 KBR Work Hours 2019 KBR Global Stats include direct employees, include direct employees for subcontractors and subcontractors and joint joint ventures 2019 KBR Global Incident Stats ventures

2018 2019 90,527,468 63,396,201 22,131,267 Why does TRIR go down? 2019 Man Hours 2019 Employee Man Hours 2019 Man Hours Because of our willingness to intervene through Courage to Care Conversations 0.126 0.114 0.163 0.200 0.126 Total Recordable Total Recordable Total Recordable Incident Rate Incident Rate Incident Rate KBR Global TRIR 2015–2019 178 74 104 0.225 Restricted Work Days Restricted Work Days Restricted Work Days within 2019 within 2019 within 2019 0.22 0.204 0.200 0.20 431 238 193 0.18 0.189 Total First Aid Cases Total First Aid Cases Total First Aid Cases with 0.16 340 onsite and 91 offsite 196 onsite and 42 offsite 144 onsite and 49 offsite 0.14 0.12 0.126 0 0 0 2015 2016 2017 2018 2019 Fatalities Fatalities Fatalities

Figure 4.1 Figure 4.2 GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 58

HEALTH SAFETY AND SECURITY

TRIR by Gender and Division 2019 Female Stats

Total Total Rate Total First Aid First Aid Medical Restricted Restricted Lost Work Fatalities Non- Division Recordable Lost Time Selection Rist Aid Cases Cases Cases Work Work Days Days Occupational Cases Cases Cases Onsite Offsite Days Cases Incidents

Corporate 16% Solutions 0 0 0.000 2 1 1 0 0 0 0 0 1 Women Energy Solutions 1 0 0.009 5 4 1 1 0 0 0 0 10 Government Solutions 2 2 0.008 73 65 8 0 0 20 147 0 186

GS US USD 6 1 0.083 29 21 8 3 2 96 2 0 15

Legacy Discontinued Ops 0 0 0.000 0 0 0 0 0 0 0 0 0 84% Technology Solutions 0 0 0.000 0 0 0 0 0 0 0 0 0 Men Total 9 3 0.020 109 91 18 4 2 116 149 0 212

2019 Male Stats

Figure 4.3 Total Total Rate Total First Aid First Aid Medical Restricted Restricted Lost Work Fatalities Non- Division Recordable Lost Time Selection Rist Aid Cases Cases Cases Work Work Days Days Occupational Cases Cases Cases Onsite Offsite Days Cases Incidents

Corporate Solutions 0 0 0.000 0 0 1 0 0 0 0 0 2

Energy Solutions 2 0 0.018 27 18 9 2 0 0 0 0 26 Government Solutions 23 7 0.090 229 189 40 14 2 15 612 0 631

GS US USD 23 6 0.318 66 42 24 13 4 47 524 0 29

Legacy Discontinued Ops 0 0 0.000 0 0 0 0 0 0 0 0 0 Technology Solutions 0 0 0.000 0 0 0 0 0 0 0 0 2 Total 48 13 0.106 322 249 73 29 6 62 1,136 0 690

Figure 4.4 GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 59

2019 HSSE AWARDS

RECIPIENT AWARD DESCRIPTION

Stuart Bradie, National Safety Council “CEOs Who Get It” List In his time as CEO, Bradie has introduced, built and cultivated a pervasive Zero Harm KBR President and CEO culture at KBR, where every employee believes that zero incidents is achievable and works toward that goal every day.

Government Solutions US EROS team South Dakota Safety Council’s Award for Honor for KBR was recognized for efforts to reduce workplace injuries and illnesses and for Exceptional Workplace Safety Performance maintaining a safe environment for everyone.

KBR - Associated Builders and Contractors (ABC) National The ABC’s highest honor was awarded requires that projects demonstrate exceptional Koch Enid Expansion Project in Oklahoma Excellence in Construction® Eagle Award in the category performance in safety, quality, and productivity, as well as “Heavy Industrial/Mega Products”. innovations in construction execution.

KBR South Dakota Safety Council (SDSC) Award of Honor SDSC's highest honor and was given to our employees for their ongoing efforts in preventing workplace injuries and illnesses.

KBR- SATORP Contractor Safety Award Received for exemplary HSE performance during the 2019 January to June Al Yusr General Maintenance Services evaluation period.

Project Earth workforce Merit Award Recognized at the 2019 ABC Excellence in Construction Awards.

KBR- SATORP Contractor Safety Award Received for exemplary HSE performance during the July to November 2019 Al Yusr General Maintenance Services evaluation period.

KBRwyle Stella, Nova and Super Nova Awards Awarded to KBRwyle contractors by NASA Johnson Space Center Contractor Safety and Health Forum.

KBR Aspire Defence Exceptional Scores from Considerate Constructors This achievement by projects Larkhill, Tidworth, Bulford and Perham Down demonstrates Scheme for December 2018 consistent good practice across key areas at one of the busiest stages of Aspire Defence's build program.

Figure 4.5 GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 60

HEALTH SAFETY AND ENVIRONMENTAL REPORTING SYSTEM HSERS is KBR’s in-house global HSSE reporting system. The Zero Harm Dashboard reports data from the HSERS system for all employees KBR’s commitment to safety to see. The system allows HSSE managers to access real-time data, track trends in incidents and alter campaigns accordingly. Other was recognized when President features include: and CEO Stuart Bradie was • Claims tracking • Personnel medical clearance tracking • Integration with Zero Harm mobile app named to the prestigious 2019 • HSSE training tracking • Historical data to support bids and proposals for all KBR employees • Random drug and alcohol program • Trend analysis and dynamic dashboard tools • Continuous updates to support business list of “CEOs Who Get It’” by the • Safety Energy tracking National Safety Council. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 61

“As the world is increasingly interconnected, everyone shares the responsibility Data and Information Security of securing cyberspace.” KBR approaches data security with the same level of rigor as we do physical safety and security. We manage information security with a multifaceted approach that prevents and minimizes Newton Lee the impact associated with cybersecurity events that could potentially put the business at risk. Our approach also uses multilayer safeguards to protect strategic and sensitive assets and ensures the privacy and security of both personal and business information for employees, subcontractors, joint venture employees, and customers.

Risks and Opportunities As the world becomes more digitally connected, the volume of cyber incidents and the level of sophistication of cybercrime tools and tradecraft continue to grow.

We have identified these developments as opportunities for expanding our cybersecurity services to government agencies and companies globally. To meet customers’ needs, KBR is equipped with a fully certified workforce and multiple cutting-edge cyber labs. By protecting our stakeholders’ data privacy rights, we gain and maintain their trust, which is a cornerstone for our continued success. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 62

GOVERNING KBR’S DATA SECURITY POLICIES AND PROCEDURES MANAGEMENT APPROACH KBR’s data security is managed at the board level through our Audit Committee. At least 1. Cyber risk assessments are conducted annually by internal and external auditors three members of the KBR Board of Directors have extensive backgrounds in technology through cyber penetration and vulnerability testing against KBR’s on-premise, public- and cybersecurity and our Chief Information Officer reports to them through Audit facing and cloud environments. All audit findings are reported to the Audit Committee Committee updates twice a year. Board and Executive Leadership Team. 2. Annual cybersecurity awareness training is provided to all employees, • Code of Business Conduct • Bring Your Own Device Procedure contractors and new hires. Training content is updated annually to align with the • Data Privacy Policy • Invention Disclosures and Patent latest cyber threats, including phishing, malware, ransomware, social media, data • Information Technology – Applications privacy and insider threats. Security and Acceptable Use Policy • EU – U.S. Privacy Shield Procedure 3. KBR conducts monthly user awareness phishing assessment campaigns and includes • Social Media Policy • System Security Plan teachable moment reinforcement. Each phishing scenario is aligned with real-world • IT Major Security Incident Response • Employee Personal Data Management cybercriminal social engineering exploits. Procedure • Export Compliance Manual 4. Cyber Times newsletter publications inform our user population of emerging threats. • Disaster Recovery and Backup Procedure 5. KBR’s cybersecurity enterprise control framework complies with industry standards • Security Access and User Account and regulatory requirements, ISO 27001 and 20000 (governing Information Security Management Procedure Management Systems), NIST 800-171 (National Institute of Standards and Technology • IT Global Backup Retention Procedure governing non-federal information systems), DFARS (Defence Federal Acquisition • IT Global Password Standard Procedure Regulation Supplement) and ITAR (International Traffic in Arms Regulations. • Acquisition, Delivery and Use of Computer 6. Cybersecurity controls are assessed annually by internal and external auditors. Hardware, Software and Other IT External ISO, NIST and Cyber Essential and Cyber Essential Plus certifications Services Procedure are maintained. All audits are reported quarterly to the Audit Committee of the Board and to the Executive Leadership Team. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 63

2019 CYBERSECURITY BY THE NUMBERS

88% of emails received each month at the KBR Secure Email Gateways were blocked based on spam, virus, dynamic reputation and 2019 ENHANCEMENTS FOR THE PROTECTION OUR APPROACH TO DATA PRIVACY IN 2019 zero-hour cyber threat detection policies. OF PERSONAL AND BUSINESS INFORMATION • Established a robust General Data Protection Regulation • Made additional investments and adopted security (GDPR) Data Privacy Committee tasked with greatly 10.2% of KBR users technology to support our cloud journey and enterprise mitigating compliance risks and educating employees on were shown to be susceptible brand monitoring. the scope of personal data and data breach response to KBR-sponsored phishing campaigns, as compared • Carried out ongoing cybersecurity Target Threat obligations through mandatory training. to Cofense™* industry 11.6% average susceptibility Hunting (TTH), leveraging our security technology, • Drafted a comprehensive intracompany data transfer rate during 2019. Ongoing assessment campaigns to detect and deter evolving cybersecurity Advance agreement to adequately protect personal data traveling in 2020 continued as part of KBR’s cybersecurity user Persistent Threats (APT) within KBR enterprise network and outside of the European Union (EU) in response to a court awareness continuous improvement program. acquired M&A networks. ruling invalidating the U.S. – EU Privacy Shield Framework. • Revised and published updated Cybersecurity Incident • Developed an action plan for improving data mapping *We engage Cofense™, formerly PhishMe®, Response procedures to align with current cyber and Record of Processing Activities of employee personal one of the leading providers threat landscape, while ensuring regulatory reporting data in the U.K. and EU of human-driven phishing defense solutions worldwide. compliance requirements were current. • Implemented updated Privacy Standard and Privacy • Continued expanding and maturing our internal Notices for EU, Middle East and Asia-Pacific regions. The average KBR resiliency rate** of 2.85 compliance framework for supporting regulatory and • Significantly revised KBR’s website to address GDPR and for scenarios launched during 2019 was better than industry-standard security frameworks as part of our new California Consumer Privacy Act and Nevada the industry 1.76 average resiliency rate of Cofense™ clients. continuing commitment to information management and Consumer Privacy Law requirements. governance. • Provided ongoing training to key employees handling **Resiliency rate is the ratio between users who reported sensitive employee personal data to minimize risk of data the email phishing simulation without falling susceptible in breaches relation to all users who fell susceptible

Figure 4.8 GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 64

Safety and Quality KBR has a rich history of delivering quality products and services to our clients. Our quality assurance is deeply linked to our commitment towards Zero Harm, as laid out in our HSSE section (Link). From the inception of our projects right through to completion, our teams are dedicated to delivering the safest and highest quality products.

Our KBR Quality Program begins at the highest level with Flowing down from the Policy level is our ISO Certified our Quality Policy which is endorsed by our CEO. This policy Integrated Management System Manual, which addresses Our KBR IMS System is externally defines KBR’s commitment to delivering quality products and all Product and Service Requirements as per the ISO 9001. services that meet or exceed the contractual requirements of audited regularly by Lloyds Registrar its customers and commits KBR to: Supporting the IMS Manual are numerous procedures across all operating centers and and manuals ranging from Internal Auditing, to Training, projects to support our continuing • Delivering products and services that meet or exceed Performance Monitoring, Management Review process, customers’ expectations. Incident Investigation and Reporting, Quality Measurement recertification process. • Complying with customers’ quality standards. with defined targets for continual improvement, as well as • Reviewing opportunities to improve upon processes regularly scheduled quality risk assessments. through audits and lessons learned. • Providing a risk and opportunity-based approach to Our Emergency Response procedures are included in our achieve business objectives. HSSE Program, which is also covered by the KBR IMS System. • Complying with applicable legislation, relevant industry standards and contractual quality requirements. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 65

Building Our Reputation Creating Conditions Commiting to the Management Approach Data and Information An Inclusive and Capitalizing on One Ocean - Developing as a Great Place to Work for People to Flourish Safety of Our People to Health and Safety Security Diverse Workforce Capability a Talent Pipeline

In addition to this, we have rolled out The Quality Performance Rating (QPR) is a numerical Other procedures regarding our Assurance and Control our Defect-Free Delivery Initiative across value calculated using a weighted average to generate of Product and Services include: numerous projects, which is targeted to an overall QPR for any given project, region, business • Quality manual strengthen the KBR Quality Culture. unit or organization as a whole and helps management • Construction Quality Control procedures understand our progress in the journey towards Defect- • Safety Engineering manuals and procedures KBR have gone above and beyond having a Quality Free Delivery. Management System, and we have committed to embedding • Risk Management policy and procedures • Commercial procedures. quality within the organizational culture as a core value, QPR is calculated using the same formula we use to so that quality can be seen, heard and felt without explicit calculate the Total Recordable Incident Rate (TRIR) as instruction or requirement. defined by OSHA, with an applied weighting based on Yearly Quality Performance Rating (QPR) Our commitment to a quality culture is instilled through regular potential risk to construction efficiency. Just as with training, clear and concise communications, appreciation the TRIR, the lower the value the better the result. 100 for excellent results, management of KPIs, and targets. 80 Metric Value x 200,000 / Total Work hours x Risk Weighting 60 Through these actions, we aim for high performance in four 40 88.69 controllable categories of activity; 20 35.68 7.34 This initiative has been hugely successful as borne out by 0 • Employee Ownership - Instill a sense of individual the following results over the past three years: 2017 2018 2019 ownership and empowerment related to quality issues. Figure 4.7 • Peer Involvement – Create peer support networks to foster and encourage a commitment to quality. Yearly Quality Metric Trends • Message integrity – Deliver authentic, understandable 337.29 and relevant messages about quality. 300 • Leadership Emphasis – Back these actions with genuine 2017 2018 2019 leadership support for quality. 200 88.69 81.17 65.84 53.88 100 53.95 35.68 34.7 36.77 31.74 25.96 20.55 88.7 19.67 6.03 7.34

We use standard quality metrics to monitor our Quality 11.4 4.41 5.87 3.08 9.84 3.52 0 2.57 3.39 3.99 0.59 1.76 0.88 0.15 0.88 0.53 1.02 0.38 0 2.58 Performance through leading and lagging indicators and 0 to drive continuous improvement efforts as part of the KBR RFI CRAFT AUDIT NCR ENG SYSTEM OVERALL WELDING NCR PROC NCR SUBS Defect-Free Delivery philosophy. INSPECTION NCR CONST TURNOVER NCR OVERALL SURVEILLANCE Figure 4.6 GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 66

An Inclusive and Diverse Workforce At KBR, we are passionate about our people, sustainability and our Zero Harm culture. These inform all we do and are at the heart of our commitment to and ongoing journey toward being a more inclusive and diverse company.

In 2019, KBR’s CEO set forth an action plan to organize an Inclusion and Diversity (I&D) Council, designed to work with the Global Sustainability Committee to advocate for changes and promote opportunities that will advance our journey toward being a more inclusive company.

KBR’s I&D team leader, appointed by the CEO, organized the I&D Council in Q1 of 2020. These individuals represent a cross section the organization, spanning geography, business units and functional areas, as well as representing the ethnic, gender and age diversity of the communities in which we operate. The I&D Council was established to review, assess and ultimately champion new initiatives that support KBR’s inclusion and diversity journey, globally, and to do so in a way that focuses on our people and enhances our company’s team of team’s culture.

Inclusion, Diversity and Equity Inclusion is the center of our Inclusion, Diversity and Equity efforts at KBR. We value as individuals also make us a better, more socially sustainable company. When all of our employees for who they are. Their ideas and unique perspectives make us promoted with our culture of inclusion, our diversity enhances innovation, improves better and stronger. KBR’s commitment to inclusion fuels our passion and inspires our decision-making and strengthens our company. confidence to tackle any problem, deliver the most complex projects, and support the most difficult missions. We are all responsible for our inclusive culture, together. At KBR, we believe our individual differences and perspectives bring value to our teams and help us develop solutions for the most challenging problems. We We also respect and value the diversity of our people. We recognize that the cultures, understand that by embracing those differences and working together, we are ethnicities, religious backgrounds and gender identities that make us who we are more innovative, more resilient and safer. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 67

Employee Resource Groups Led by employees with support from KBR, our employee resource groups (ERGs) provide outlets for employees to network and build relationships, while also creating opportunities for professional development and social activism. These shared communities allow employees to make connections and participate in social engagement in a way that creates equal opportunity for everyone to thrive. Here are some examples:

ASPIRE is an employee-driven resource IMPACT is an employee-led organization OK NoW was created in 2019 in the U.K. and Pride and Allies is an employee-led group whose group committed to the development that serves as the launching point for advocates building resilience and promoting mission is to support the LGBTQIA+ community of women and the promotion of developing young professionals within education around self-care and well-being. and help to educate its allies. Valuing and gender diversity at KBR. ASPIRE is KBR. Through professional development, The group tackles difficult conversations and treating human beings equally and equitably, dedicated to building a culture of networking, community outreach, and works to shift the culture around mental health regardless of sexual orientation or gender inclusion and respect in the belief that career and personal enrichment, IMPACT through various informational sessions. OK NoW identify, are rightfully becoming the norm for equity enhances team performance seeks to motivate, retain and develop our also advocated for a Well-being Ambassador prospective, new and existing employees, and and makes KBR a better, more efficient members, and transform them into future program to be established in the U.K., which is for our customers. Pride and Allies was founded business. All employees are welcome and leaders at KBR. set to launch in 2020, along with the planned on the belief that businesses are more successful encouraged to join regardless of gender. rollout of OK NoW chapters across all regions and employees more productive when those • 13 chapters and business units. employees can be themselves. The group is for everyone, no matter their sexual orientation. • 8 chapters • 6 countries • 5 countries • Focus on early career professiionals • 1 chapter • Initial focus on women in leadership • Focus on mental health and Well-being • 1 chapter • Focus on LGBTQIA+ communities GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 68

2019 DIVERSITY AWARDS

KBR RACE EQUALITY AWARD Awarded by Royal Academy of I&D By the Numbers Engineering for supporting the RAE Looking Forward Graduate Engineering Program As part of our Inclusion, Diversity and Equity efforts, we are committed to KBR’s Chief People Officer, in cooperation with the I&D Council, reviewing and communicating our employee metrics to inform and advance Eniola Fujamade has implemented an action plan to report, assess, monitor our corporate goals. We have recently implemented a new human capital WISE ONE TO WATCH AWARD and evaluate progress on specific operating practices. As management system, which has allowed us to understand and report on Awarded by the WISE Campaign for part of our commitment to Inclusion, Diversity and Equity, KBR our global workforce in a way that we have not been able to do previously. her work in promoting diversity and will continually reevaluate our practices and learn from our The results are shown in the below charts and tables and demonstrate that inclusion in the STEM community action plans and efforts. Our focus is our people. Our goal and we have work to do. However, KBR is committed to continual improvement expectation are that all employees feel that they are part of the Stephanie Trevino for our employees, for our customers and for our other stakeholders. Using KBR team and that we can achieve this by providing equality DIVERSITYFIRST LEADERSHIP AWARD this data, we have put an action plan in place to outline the ways in which Awarded by the Texas across all underrepresented groups. KBR’s action items set forth we will achieve our goals as we continue on our I&D journey. Diversity Council in 2020 are:

GENDER REPRESENTATION AGE REPRESENTATION

FEMALEFEMALE MALEMALE UNDERUNDER 3030 30-5030-50 OVEROVER 5050 HIRING REWARDING DEVELOPING 25%25% 75%75% BOARDBOARD OFOF DIRECTORSDIRECTORS -- %% -- %% 100%100% BOARDBOARD OFOF DIRECTORSDIRECTORS 23%23% 77%77% KBRKBR 10%10% 51%51% 39%39% KBRKBR 9%9% 91%91% EXECUTIVEEXECUTIVE LEADERSHIPLEADERSHIP TEAMTEAM -- %% 9%9% 91%91% EXECUTIVEEXECUTIVE LEADERSHIPLEADERSHIP TEAMTEAM

**ExcludesExcludes newnew hireshires thatthat havehave notnot beenbeen onboardedonboarded Figure 4.9 ENGAGING REINFORCING GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 69

Capitalizing on Capability

We proactively manage talent and succession for leadership and mission-critical roles, offer development opportunities to all our people, and support them with ongoing feedback and coaching. Our future success is ensured by the quality and depth of our leadership and technical and functional talent. Our talent cycle is founded on assessments of performance and potential and robust talent calibration, viewed through the lens of business-critical talent pools. Our leadership talent pools are nurtured and challenged through structured global programs, which enable development of capabilities required at critical career stages. These include opportunities for first-time managers, frontline managers, high-potential leaders and executives.

Training and Development We manage our global training and education through toward a broad audience across the organization. They KBR is committed to investing in its people and creating an integrated set of management practices, policies and are compulsory and monitored via our LMS. These training environments where employees thrive and successfully procedures; an enterprise-wide learning management system programs apply to all employees of KBR, its subsidiaries or progress their careers, while adding competence and (LMS); an enterprise Talent Development Centre of Excellence affiliated companies worldwide. capability to the team to accomplish business goals. All (COE); and as-needed actions and programs. We also use a employees have access to a multitude of developmental globally recognized ADDIE (Analysis, Design, Development, Other training and education initiatives may be ad hoc, or programs to increase their skills, broaden their experience Implementation and Evaluation) model for training needs responsive to a particular business need. Ad hoc or responsive and enhance their future career opportunities. assessment, development and delivery. training may be shorter term in focus. However, we believe training should promote a longer-term perspective towards Our commitment to people development and learning Training and learning interventions deployed by KBR are systemic deeper leadership and management skills development to goes beyond simple regulatory compliance and and are used to proactively reach a defined audience. Topics improve operational performance and employee experience. includes leadership, management, interpersonal skills, such as safety, environmental protection, information security communication skills and technical learning opportunities. and our Code of Business Conduct are intentionally directed GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 70

MANAGEMENT APPROACH and overall contribution to the organization are provided. Using Responsibilities for Training and Development KBR training and education is covered by our global Talent a continuous process of setting objectives, assessing progress, Managers play a vital role across the annual goals-to-performance Management Policy, which is approved by the Executive Vice and providing on-going coaching and feedback, to ensure that process, understanding learning and development needs and helping employees find appropriate resources. KBR’s business units President, Chief People Officer. employees are meeting their performance objectives and career and monitoring maintain responsibility for budgeting for employee goals. development each year. The Talent Management Policy sets out the following commitments: • Employees have equal access to developmental programs to Training and education is prioritized by business owners and • KBR is committed to the continued development of its increase their skills, broaden their experience and enhance their supported by the Talent Development Center of Excellence for employees and believes the employee and the company have future career opportunities. development and launch. Content and learning methods are a shared responsibility for career and individual development. developed through business reviews and environmental scans to reduce harm, improve skills and abilities, and to create a culture of KBR recognizes the need for employees to acquire additional • Employee development is covered by a Business and inclusion, engagement and accomplishment. skills, knowledge and experience to meet the short-term needs Management Training procedure, which covers all employees of the job, as well as the longer-term needs of the individual and provides guidelines for: Human Resources leaders and representatives in the business and the company to further their careers within KBR. - Internally delivered courses units maintain an active partnership with leadership to understand - Company-funded training training and education needs and to shape programs and • We provide guidelines and procedures to enable KBR’s leaders - eLearning and self-development approaches. The corporate Talent Development group supports to consistently model and communicate the KBR Way for - Educational assistance global leadership programs, learning interventions, the learning management system, and talent and performance management developing employees, inclusive of identifying and aligning - Educational leaves of absence processes within the HRIS system. The corporate Talent group also talented employees with the needs of the organization. partners with business units and HR leadership to meet defined This training procedure lays out manager and employee roles and needs. • Guidelines for managers and employees to work together responsibilities, as well as record-keeping requirements. to plan, monitor, and review an employee’s work objectives GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 71

Resources - The 2019-2020 class consisted of 18 senior, high-potential Performance Management KBR training and education is enhanced by robust resources: leaders from across our business units and functional groups. KBR’s Performance Management process links our business • Global learning management system (LMS) - To date, the program has over 50 alumni and current students. strategy and goals to the performance of our employees. The • Library of over 46,000 learning modules, expert videos, process is governed by the Talent Management Policy, guided eBooks and support tools, available to every employee • Manager Excellence Program (MEP) – The MEP is a year in duration by a Performance Management procedure, and includes • A Talent Development group dedicated to delivering and consists of an online leadership assessment simulation and a goal alignment, performance coaching, feedback and leadership development, management skills, eLearning week-long classroom session on operational execution, coaching development. modules, and talent and performance performance, inclusion and diversity, and communication. processes for all KBR employees - Targets emerging high-potential leaders with eight or more The annual performance process is designed to ensure • Human Resources business partners and learning years’ experience. that KBR employees’ performance and development goals administrators across business units focused on meeting - The 2019 program included three cadres for a total of 55 are clearly defined and discussed and effectively and fairly specific training and education needs participants. Students represented all business units and managed. This is accomplished through regular one-to-one functional groups globally. meetings between managers and employees, interim reviews, Learning Programs Designed to Augment Employee Skills - The capstone session challenges students with a business and annual performance assessment reviews. • Global Leadership Development Program (GLDP) – The problem simulation and team presentations. yearlong GLDP consists of an intensive live executive The annual Performance Management cycle involves three assessment simulation; week-long classroom sessions • Leadership Strategies – The is a development program for our key activities: on strategy, people development, inclusion and diversity, domestic Government Solutions business. 1. Employee goal setting and communication; and a strategic business project and - Includes a week-long classroom session targeting top 2. Quarter conversations presentation to the KBR Executive Leadership Team. managers across the business unit. 3. Annual performance review - Targets top candidate assessment and development for - 60 leaders participated in 2019. future executive leadership. This procedure applies to all employees of KBR, its subsidiaries or affiliated companies worldwide. In 2019, that population was 16,400 employees across the globe. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 72

One Ocean: Developing a Talent Pipeline education and industry Our aim is to inspire KBR One Ocean is the bedrock of our sustainability commitment. The program is a global young people from diverse backgrounds collaboration between KBR employees, local schools, youth, and environmental networks and to opt for STEAM (science, technology, international environmental organizations. It was designed to develop professional skills and core engineering, the arts and mathematics) competencies in KBR’s new talent while also inspiring and attracting young students to careers in subjects that could lead to a career in engineering and technology, thus creating a robust talent pipeline. engineering, thereby developing an inclusive and diverse talent pipeline. Developed to be accessed online, the One Ocean platform provides instructors a flexible modular environmental and sustainability syllabus. With assistance from KBR employees, instructors can access detailed lesson plans, handouts and resources for students. Courses can be customized to Figure 4.10 suit the needs of the school or organization, and the materials can be used to facilitate online or in-person delivery.

In addition to the curriculum, KBR employees share industry expertise and knowledge to mentor young people and to encourage them to investigate and develop creative and practical solutions to environmental issues affecting the ocean and climate. Topics discussed include design thinking and systems thinking, circular economy and biomimicry principles, and other innovative and sustainable approaches. Courses are designed to help cultivate 21st-century core competencies and transferable skills, such The One Ocean syllabus has been designed with the dual purpose of providing internal training as problem-solving, scientific literacy and reasoning, leadership and team-working, collaboration, workshops for KBR employees in sustainable engineering concepts and bridging the gap between analytical and critical thinking, global and social awareness, social responsibility, communication, and creativity — all of which will prepare students and our graduates for the future of work. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 73

2018 2019 2020 JUNE JULY AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY JUNE JULY AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY

Industry Student Fair Fully delivered with One Ocean Introduction Internal office Showcase in Australia into three schools End-of-term in Saudi Arabia to KBR staff Beach Clean Introduction Showcase: Students introduction in Poland launch assembly at presented poems/ (Oman, Poland in Houston Identified and each school films/presentations Baku, Abu Dhabi) Introduction Beach Clean conacted local (14/15 Year olds) to KBR staff One new UK schools launch in Fully delivered in Singapore school joined Saudi Arabia Beach Clean into one school Official global Ocean Expert in Chennai launch with all syllabus panel with UK three schools development schools Fully delivered Beach Clean began into one school launch in Family Safety Day in Singapore Chennai Three schools Fully delivered into with One Ocean Fully delivered Global IMPACT chapter were introduction to KBR into one school confirmed for the three UK schools via in Perth Fully delivered 2018/2019 year lunchtime and after introduced to One Ocean staff in Chennai Family Safety Day Beach Clean into one school school clubs supported (Chennai, Singapore, Saudi with One Ocean and evironment in Poland by the KBR graduates Arabia, Australia) introduction to KBR workshop with staff in Singapore all four UK schools Figure 4.11

UK SINGAPORE CHENNAI SAUDI ARABIA HOUSTON POLAND OTHER REGIONS In 2019, we launched One Ocean in 10 schools in six countries 4 schools 1 school 1 school 3 schools 50 students engaged for 1 school In discussion with around the world, reaching 1,000 students. We are currently in ﬁrst session to launch schools in Austrailia, 60 students One team APAC syllabus One year syllabus 75 students program Modules from one year Abu Dhabi and Oman. discussions to open five more schools, including in Australia, and enhanced lesson syllabus taught across Due to launch in the One year syllabus with plans Launched 6th October Customised 10 week Partnered with Galveston 500 students at technical new school term with Oman, Abu Dhabi and China. enhanced lesson plans with beach clean and syllabus Bay Foundation college the online platform Pool of 41 KBR engineers KBR engineers present family day on a weekly rota. monthly for Launched 23rd Modules of syllabus Translated materials into Delaware, Raleigh, presentations / lab 2 more schools in November 2019 shared Polish Maryland and Launched 4th October sessions discussions to on-board Alabama are in the 2019 with beach clearn Translated materials Launched 21st November Initial launch 2nd December process of recruiting Launched 12th of October into Arabic with beach clean 2019 with school assembly schools for the new US 2019 with beach clean school year Schools to start Sepember Beach clean on start of full 2020 one year syllabus in April. (delayed to September) Figure 4.12 GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 74

Prosperity

In This Section The best way to predict Our Social Value Program 79 Community and social vitality 83 the future is to create it. Supporting human rights 81 Rights of Indigenous Peoples 83 Employment and wealth generation 84 About this report 85 Appendix 86 GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 75

Our Social Value Program Community and Social Vitality Supporting Human Rights Employment and Wealth Generation About This Report

Prosperity

In line with the UN’ s Agenda for Sustainable Development on Prosperity: “We are determined to ensure that all human beings can enjoy prosperous and fulfilling lives and that economic, social and technological progress occurs in harmony with nature.”

Transforming our world: the 2030 Agenda for Sustainable Development, 2015.

At KBR, we believe it is our responsibility to be a positive force for change in the world. We have a duty not only to safeguard the environment, but also to create social value and contribute to the economic prosperity of the communities where we live and work. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 76

Our Social Value Program Community and Social Vitality Supporting Human Rights Employment and Wealth Generation About This Report

Our Social Value Program

In 2019, KBR, for the first time, evaluated its U.K.-based projects, calculating the social return on investment and economic impact to fully understand the social value (social, environmental and economic impact) that we have created. Using this baseline, we can understand what progress is being made in all areas, on all U.K.-based projects, through regular measurement, reporting, review and objective setting.

As a part of our evolving Social Value Plan, KBR is committed to adopting the right systems to both support the project life cycle, and also to forecast, deliver, monitor and evaluate all social value initiatives and activities across all projects. KBR partnered with Social Profit Calculator, whose database includes a set of standardized impact measures for deadweight, attribution and displacement to avoid over-claiming the values created in delivering project key performance indicators (KPIs). GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 77

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Our Achievements U.K. Projects

Across 14 U.K.-based projects in 2019, an SROI of £92,702,989 was achieved through the The combined SROI and economic value Having measured the social impact across delivery of a comprehensive range of KPI targets covering many aspects of social value. gave KBR an overall total Social Value Ratio 14 U.K.-based projects in our Government of £1.95, meaning for every £1 income there is Solutions business, KBR is now further a £1.95 return on investment. This means that £19,431,284£19,431,284 analyzing data to create project plans, set with a total project turnover of £316,469,266, £32,118,579£32,118,579 objectives, and share best practices for a total social value of £615,635,676 was £38,689,153£38,689,153 delivering improved outcomes. achieved in 2019 through KBR’s U.K.-based £2,463,973£2,463,973 projects alone. SROI of £92,702,989 SROI of Figure 5.1 £92,702,989

Additionally, the total economic impact created over the same period was calculated at £522,932,687, achieved by investing in local supply chains and creating local employment opportunities.

Figure 5.3

Figure 5.2 GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 78

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Allenby Connaught Project

APPROACH OUTCOMES Our project team has significantly 1. OUR PROJECT TEAM IDENTIFIED THE FOLLOWING ALTERNATIVE improved and expanded our services RECOVERY OPTIONS AT THE PROJECT: and reduced the environmental impact • Mixed waste is taken to a facility, where it is burned to produce electricity of waste produced at project facilities. for the national grid. The small quantity of residual ash is used as an Initially, recycling rates were around additive in building products 10%, with the remaining 90% going to • Food waste is collected separately and is 100% recycled at a facility landfill. Our challenge in supporting using a process called anaerobic digestion, which turns food waste into the Army Units so they could meet renewable energy. The renewable energy produced is enough to service 4,000 homes in the local community. Additionally, the resulting slurry from environmental targets was delivering the process is used as an organic fertilizer for farmers to use on crops. waste management solutions focused on the diversion of waste from landfills 2. ENVIRONMENTAL BENEFITS ACHIEVED INCLUDE: by utilizing alternative technologies. • 53% of all waste has been recycled, with any unrecyclable residual waste Engaging with the right waste contractor being sent to the local EfW (Energy for Waste) facility, to provide the vision was essential to where it is burnt to produce electricity for the National Grid. Additionally, accomplishing our zero-to-landfill goal. any residual ash has been used in building materials. • To add to the great work in waste management, the project has achieved 338,000 m2 of environment protection by creating a number of habitat hubs, including meadow grass, wildflowers, ponds and woodlands, which provide shelter and food for animals, particularly insects. • A total of 375 trees and 675 saplings were planted by the KBR project team during the year. Factoring in 320 trees felled, the project produced a net figure of 730 and a carbon emission reduction on the previous year of 21,950 TCO2. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 79

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Aspire Defence Services Limited

Aspire Defence Services Limited (ADSL) has many years’ experience providing IMPACT HIGHLIGHTS award-winning facilities and project management services. KBR, in partnership ADSL has been able to hit most with ADSL, has developed an impressive skill base across a wide range of trades social value targets by prioritizing it SROI £43,122,834 and services and developed a depth of expertise that enables our customer to at the beginning of projects: receive the best possible service. Economic Impact £197,806,443 • Social: Provided jobs, increased skill set of local communities, and Operational Asset £1,263,193,488 The services we deliver to the U.K. Ministry of Defence directly and through our created opportunities for growth (Over 25 years) Value supply chain include planned and reactive maintenance, 24/7 helpdesk, security, through education in schools and sports and leisure, administration, media and reprographics, transport, energy apprenticeships. and utilities, grounds maintenance, locksmiths, pest control, waste and recycling, • Economic: As evidenced by the cleaning, window cleaning, and catering. SROI, there have been significant positive effects to the local community, and for the broader economy, from fiscal savings. • Environment: Aside from waste OBJECTIVES AND APPROACH management services, ASDL has been able to achieve 338,000 m2 ADSL wanted to reduce environmental impact of waste produced from project of environment protection, and facilities, with a vision of accomplishing a zero-to-landfill goal. Initially, recycling environmental benefits are in the rates were around 10% with the remaining 90% going to landfill. The results surplus of £2M. after program implementation: 53% of all waste has been recycled, with any By achieving a high social unrecyclable residual waste being sent to the local EfW (Energy for Waste) facility, value return, ADSL has become where it is burnt to produce electricity for the National Grid. Additionally, any more attractive as an asset for residual ash has been used in building materials. project bids and has serves as a benchmark for all projects to follow. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 80

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Community and Social Vitality

Collectively, KBR makes a significant impact in local communities across our global footprint. Since 2007, KBR has contributed nearly $20 million to benefit charitable causes around the world. This includes the more than $6 million raised at our charity golf tournaments, held annually in Houston, which benefits local and national nonprofit organizations. By actively supporting our communities through corporate and employee giving and volunteering events, we hope to further contribute to meaningful social change. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 81

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KBR People: Making a Difference in Our Communities

• KBR employees in Gurgaon, India, raised funds and • KBR’s office in Raleigh, North Carolina, collected bicycles donated clothing items and school supplies for and toys for local charity, Healing Transitions underprivileged children. • KBRwyle employees raised more than $7,000 to buy • Employees at KBR’s Jacksonville, Florida, office provided Christmas presents for children at a local orphanage Thanksgiving and Christmas meals for more than 350 in Zary, Poland, a city close to where they work families during the holiday season. supporting the U.S. Army’s Logistics Civil Augmentation (LOGCAP) IV Program. • The community relations committee in Jacksonville raised more than $7,000 to support members of the community • KBR Family Days incorporated the introduction of the in need. One Ocean program. Around the world, employees, their families and students joined forces to clean beaches and • KBR employees in Houston, Texas, donated thousands of waterways in their respective regions. Together, more new, unwrapped toys to the Operation: Stocking Stuffer 1,500 of us cleared hundred of tons of waste across toy drive. The company also purchased $15,000 worth our global footprint. of toys that were added to the collection. • KBR sponsored and participated in the Victorian Indigenous • KBR served as a sponsor for the U.K. Metropolitan Engineering Winter School (VIEWS) program, creating an Police’s annual Met Christmas Tree project. environment where students can learn more about various engineering fields and gain an understanding of the • Employees in Clear Lake, Texas, prepared bags with opportunities they have in our industry. personal care products, snacks, blankets and much more for the homeless, and also donated approximately 300 gallon-sized bags and 45 blankets to Star of Hope. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 82

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Supporting Human Rights

As a global company, we impact economies and business growth in the communities where we operate, providing See the KBR and Ethics section in the Governing with Purpose opportunities for disadvantaged businesses and local suppliers where appropriate. We respect and uphold the highest portion of this report for more information on how KBR promotes human rights standards and do not tolerate any form of discrimination, harassment or human rights violation. human rights, as well as subsequent policies and procedures for ensuring strict compliance among employees, subcontractors We have over 97,000 suppliers in 170 countries. KBR takes a risk-based approach in assessing human rights vulnerabilities and suppliers. in its supply chain. Certain subcontractors and lower-tier subcontractors in high-risk countries are the focus of enhanced due diligence efforts to mitigate risks regarding human rights abuses. Our human rights vulnerabilities are assessed at the board Human Rights KBR Policies and Procedures level and form part of our Enterprise Risk Management process. 1. Global Human Rights Policy 2. Trafficking in Persons Policy The treatment of foreign, low-skilled employees working for KBR subcontractors in host countries is an area of focus and is 3. U.K. Modern Slavery Act addressed through our Trafficking in Persons (TIPS) and the Modern Slavery Act (MSA) programs. 4. COBC 5. Supplier Code of Conduct 6. Combatting Trafficking in Persons (CTIPs) Procedure 7. Supplier Performance Evaluation Procedures 8. Procurement Corrective Action Team Procedure GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 83

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OUR ACTIONS

• KBR acknowledges its corporate responsibility to respect of the workforce is also required to complete separate TIPS • KBR’s Supplier Code of Conduct affirms that KBR has zero human rights as delineated in the United Nations Guiding training as mandated by the U.S. Government for defense tolerance for child or forced labor and trafficking in persons Principles on Business and Human Rights. KBR has adopted contractors. and requires suppliers to adhere to these principles. human rights as an element of its Governance pillar in its sustainability platform. KBR further recognizes that modern • KBR has established an Ethics Hotline, where employees and • KBR conducts TIPS/MSA audits/inspections of subcontractors slavery is a heinous crim that affects communities and others can report COBC violations or human rights violations. that include interviews and surveys of subcontractor individuals across the globe. KBR engages a third-party vendor to manage the Ethics employees, housing inspections and prevailing wage reviews. Hotline, which provides additional assurances that reporters • KBR has existing policies and procedures in relation to human can maintain their anonymity when reporting suspected • KBR conducts restricted party screening on subcontractors rights that include acknowledgement of the principles COBC violations. and vendors to ensure KBR is doing business with entities that contained in the United Nations Universal Declaration of are not flagged for designated human rights abuses or other Human Rights. • KBR’s Legal Department (COBC) promptly and thoroughly watchlists/sanctions. investigates any report that may include indications of human • KBR’s Code of Business Conduct (COBC) recognizes promoting rights abuses and contacts the appropriate authorities • KBR conducts additional due diligence on certain business human rights as a corporate responsibility and expects all when appropriate. KBR has notified the U.S. Department of partners that include reviewing any derogatory information employees to adhere to the COBC. All employees are required Defense-Inspector General concerning a fraud scheme where concerning human rights abuses. to complete annual Ethics training, which also includes training labor broker(s) recruited unwitting job applicants for fictitious regarding human trafficking. Additionally, a large portion defense contractor jobs with no involvement with KBR. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 84

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Supply Chain Transparency and Human Rights – Our Approach

We require all suppliers and subcontractors to certify the KBR Supplier Code of Conduct.

1. High-risk subcontractors performing work in high-risk locations outside the U.S. are required to complete our supplier anti-corruption compliance questionnaire. 2. We screen new suppliers and subcontractors on their compliance with HSSE codes, ISO certifications and ethical practices through our prequalification questionnaire. 3. We monitor suppliers and subcontractors on an ongoing basis through performance evaluations, shop surveys and new supplier assessment procedures. 4. Our procurement corrective action team reviews all performance evaluations, inspection reports, shop surveys, watch lists and unapproved vendors and collaborates closely with our global master data team to prevent business with noncompliant business partners. 5. We have a Combating Trafficking in Persons (CTIPs) plan in place for every government site. 6. Prior to starting work, we perform a critical review of our subcontractors’ CTIPs plan as part of our risk assessment process. 7. Every three months, we conduct CTIPs audits and inspections. Our Quality Assurance function performs biannual assessments of our CTIPs program to ensure effectiveness. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 85

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Rights of Indigenous Peoples KBR’s vision for our Reflect RAP (and its successor KBR 1 KBR has been operating in Australia for over 50 years. We acknowledge and give thanks to the Plans) is that Aboriginal and Torres Strait Islander custodians of that country and their continuing connection to land, culture and community, and engagement is an everyday part of our business, we pay our respects to Elders past, present and future. processes, systems, attitudes and behaviours. Just as Zero Harm has been a transformational success,

In 2019, KBR published its Reconciliation Action Plan (RAP) to provide a framework for realizing the our RAP will take our workforce on a journey of KBR RECONCILIATION ACTION PLAN – JULY 2019/JULY 2021 vision of reconciliation with the Indigenous Peoples of Australia and Torres Strait Island. It provides awareness, understanding, acceptance and a practical plan for action built around engagement, respect and opportunities. The plan sets opportunities. out how KBR will develop relationships with Aboriginal and Torres Strait Islander stakeholders and explore specific actions and initiatives that we can implement. This process will help to create an Our desire to make a difference for Aboriginal and environment that fosters changes that are meaningful, mutually beneficial and sustainable. Torres Strait Islander peoples has already been • Engaging with Traditional Custodians and demonstrated on several projects over the years. performing due diligence to ensure that areas KBR’s RAP story began in 2018. Senior leaders began a journey that has not only been personally This work has included: and items of sensitivity and significance are transforming, but that will also be transformational for the company, our employees, our partners • Employing Aboriginal and Torres Strait Islander protected and managed and our customers. peoples on major infrastructure and engineering • Engaging Aboriginal businesses to provide programs contracted services and supplies The RAP parallels the journey that KBR has taken place in the Zero Harm program. The success of • Providing training, mentoring and support to • Delivering employment opportunities through that program has resulted in extraordinary safety record improvements, as each employee owns Aboriginal and Torres Strait Islander peoples to cadetships and recruitment specifically targeting safety for themselves and their colleagues in the workplace, and for their loved ones at home and enhance retention and career progression Aboriginal and Torres Strait Islander employees. play. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 86

Our Social Value Program Community and Social Vitality Supporting Human Rights Employment and Wealth Generation About This Report

Employment and Wealth Generation

18,627 2019 Total Revenues 2019 Earnings per Share $1.41 Memberships and Associations KBR’s position as a thought leader in the fields $5,639MM & Adjusted Earnings Per Share $1.69 in which we deliver has grown in recent years, thanks in no small part to the expertise of our 5,568 2019 Total number Hires Voluntary Turnover people and enhanced and expanding advisory 1,148 of Employees turnover and consulting capability. One example is our 7,942 15% position in global energy transition, particularly 28,000 3,829 Male Female Undisclosed as it pertains to hydrogen. KBR is currently a member and leading voice in the following Figure 5.4 Figure 5.5 hydrogen-related industry groups.

28,000 • Australian Hydrogen Council (formerly HMA) • Asia-Pacific Hydrogen Association (2020) • Hydrogen and Fuel Cell Association of Singapore (2020) 12,892 • Japan’s Green Ammonia Consortium • Ammonia Energy Association 4,406 2,665 1,892 1,793 1,540 1,000 952 489 274 58 23 16 Worker Sub Type Worker United Middle United Asia Austrailia Europe India Africa Mexico Canada Russia ELT Other Total States East Kingdom Figure 5.6 GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 87

Our Social Value Program Community and Social Vitality Supporting Human Rights Employment and Wealth Generation About This Report

About this report

This report is a full, balanced and transparent representation of the Company’s material topics covering environmental, For more information about our company, please visit our social, and governance related impacts and how they are managed, using the frameworks provided by the Global corporate website at: www.kbr.com. Additional information Reporting Initiative Standards (GRI): Core Option; the Sustainability Accounting Standards Board (SASB) and the Taskforce about KBR’s operations, consolidated entities and financial on Climate Related Financial Disclosure (TCFD). As a member of the UN Global Compact this report also serves as our performance is available in our 2019 Annual Report and Communication on Progress (CoP) and our commitment to meet fundamental responsibilities in the areas of human Form 10-K, available for download at kbr.com. rights, labor, environment and anti-corruption. KBR has reported annually since 2013 under the GRI G4 Core Information presented in this Sustainability Report covers business activity in calendar year January 1, 2019 to December guidelines. The last report published was for the calendar 31, 2019. The report encompasses all business units owned by KBR, Inc. globally including joint ventures. All data should be year 2018. We intend to continue reporting on an annual assumed to be global and as of December 31, 2019, unless otherwise noted. This report was published December 18, 2020. basis.

Prepared under the direction of the Vice President of Public Law and KBR’s Sustainability and Corporate Responsibility Board If you have questions on this report please email us Committee, external assurance has been applied to our financial data as reported, which is certified in our 2018 Annual at [email protected]. Report and Form 10-K and our Climate and Carbon data as verified by ClimatePartners. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 88

Appendix

Creativity is thinking up new things. Innovation is doing new things.

Theodore Levitt GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 89

Governing with Purpose Planet GRI 300: People GRI 400: Taskforce on Climate-related Environmental Social Financial Disclosure - 2019 Global Reporting Index (GRI) Content Index and Sustainability Accounting Standards Board (SASB) Index

Governing with Purpose

TOPIC GRI STANDARD SASB CODE DISCLOSURE PAGE NUMBER(S) AND/OR URL(S)

102-1 Name of the organization KBR, Inc. 102-2 Activities, brands, products, and services About Us, page 12; Our Products and Services, page 13; Our Key Markets, page 13 102-3 Location of headquarters Houston, Texas 102-4 Locations of operations 2019 Annual Report: Properties, page 26 102-5 Ownership and legal form KBR, Inc. (NYSE: KBR) is a publicly traded, incorporated company existing under the laws of the State of Delaware. 102-6 Markets served Our Key Markets, page 13; 2019 Annual Report, page 7 Organizational 102-7 Scale of the organization 2019 Annual Report, pages 7, 9, and 10 Profile 102-8 Information on employees and other workers Employment and Wealth Generation, page 84 102-9 Supply chain 2019 Annual Report, page 10 102-10 Significant changes to the organization and its supply chain KBR had no significant changes in its supply chain in 2019. 102-11 Precautionary Principle or Approach Precautionary Approach, page 24 102-12 External initiatives KBR expressly supports the United Nations Declaration of Human Rights (UDHR), also known as the UN Human Rights Charter. We have committed to contribute to global progress and intend to use the United Nations Sustainable Development Goals (SDGs) to guide our efforts in future years. We are a member of the UN Global Compact. 102-13 Membership of associations Memberships and Associations, appendix

102-14 Statement from senior decision-maker A message from our CEO, page 4 Strategy 102-15 Key impacts, risks, and opportunities 2019 Annual Report: Risk Factors, pages 12-25

102-16 Values, principles, standards, and norms of behavior Our Behaviors, Mission and Vision, page 26 Ethics and Integrity 102-17 Mechanisms for advice and concerns about ethics KBR and Ethics, page 28. Any violation of the law or the Code of Business Conduct can be reported either directly or anonymously through the confidential KBR Ethics Hotline and Reporting system at Ethics Point. The hotline is available 24 hours a day, 7 days a week. In addition, an investors’ hotline is available to enable stockholders to call with concerns. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 90

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TOPIC GRI STANDARD SASB COD DISCLOSURE PAGE NUMBER(S) AND/OR URL(S)

102-18 Governance structure Sustainability and Corporate Responsibility Board Committee, page 16; Corporate Governance Structure of kbr.com 102-19 Delegating authority 2020 Proxy Statement: Governance Highlights, page 10 102-20 Executive-level responsibility for economic, Governing with Purpose, page 15 environmental, and social topics 102-21 Consulting stakeholders on economic, Materiality, page 21; Stakeholder Inclusiveness, page 20; 2020 Proxy Statement: Stockholder Engagement, page 29 environmental, and social topics 102-22 Composition of the highest governance body Sustainability and Corporate Sustainability Board Committee, page 15-16; 2020 Proxy Statement, pages 16-26 and its committees 102-23 Chair of the highest governance body General Lester L. Lyles, USAF (Ret.), Chairman of the Board 102-24 Nominating and selecting the highest governance body Sustainability and Corporate Responsibility Board Committee, pages 15-16; 2020 Proxy Statement, pages 17-18 and 82-84 102-25 Conflicts of interest 2020 Proxy Statement: Director Qualifications, page 18 Governance 102-26 Role of highest governance body in setting purpose, Governing with Purpose, page 15 values, and strategy 102-27 Collective knowledge of highest governance body 2020 Proxy Statement, pages 16 and 19-23 102-28 Evaluating the highest governance body’s performance 2020 Proxy Statement 102-29 Identifying and managing economic, environmental, Materiality, pages 22 and social impacts 102-30 Effectiveness of risk management processes 2019 Annual Report: Risk Factors, pages 12-25 102-31 Review of economic, environmental, and social topics Governing with Purpose, page 16 and Risks and Opportunity Oversight, page 31 102-32 Highest governance body’s role in sustainability reporting Governing with Purpose, page 16 102-33 Communicating critical concerns Governing with Purpose, page 16 102-34 Nature and total number of critical concerns 2019 Annual Report: pages 110-113 102-35 Remuneration policies 2020 Proxy Statement, pages 41-44

102-36 Process for determining remuneration 2020 Proxy Statement, pages 41-44 102-37 Stakeholders’ involvement in remuneration 2020 Proxy Statement, page 44 Stakeholder 102-38 Annual total compensation ratio 2020 Proxy Statement, pages 70-71 Engagement 102-39 Percentage increase in annual total compensation ratio 2020 Proxy Statement 102-40 List of stakeholder groups Materiality, page 22-23; Stakeholder Inclusiveness, page 20; 2020 Proxy Statement: Stockholder Engagement, page 29 102-41 Collective bargaining agreements As of December 31, 2019, we had approximately 28,000 employees world-wide, (excluding joint ventures), of which approximately 6% were covered by collective bargaining agreements. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 91

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102-42 Identifying and selecting stakeholders Stakeholder Inclusiveness, page 20-21 Stakeholder Engagement 102-43 Approach to stakeholder engagement Stakeholder Inclusiveness, page 20-21 102-44 Key topics and concerns raised Stakeholder Inclusiveness, page 22

102-45 Entities included in the consolidated financial statements 2019 Annual Report 102-46 Defining report content and topic Boundaries Materiality, page 22-23 102-47 List of material topics Materiality, page 22 Reporting 102-48 Restatements of information None after we restated our 2013 Annual Report and Form 10-K in 2014 Practice 102-49 Changes in reporting In 2014, 2015 and 2016, KBR reported using General Reporting Initiative (GRI) Generation 4 Core guidelines. In 2017, 2018 and 2019, KBR used the GRI™ Core Option. 102-50 Reporting period January 1, 2019 to December 31, 2019 102-51 Date of most recent report 2018

102-52 Reporting cycle Annual 102-53 Contact point for questions regarding the report If you have questions on this report, please email us at [email protected] 102-54 Claims of reporting in accordance with the GRI Standards GRI™ Core Option 102-55 GRI content index Indexing, page 87 102-56 External assurance The Managing Our Carbon Footprint section of this report and The financial data cited in our 2019 Annual Report and Form 10-K were third party verified. 103-1 Explanation of the material topic and its boundary Materiality, page 22-23 and About this Report, page 85 Management Approach 103-2 The management approach and its components See the Management Approach write up in each Material Topic Section. 103-3 Evaluation of the management approach Our Integrated Management System (IMS) requires a review and evaluation of all KBR policies, procedures, manuals and guidelines at least annually by the Executive Leadership Team. Page 34. 201-1 Direct economic value generated and distributed 2019 Employment and Wealth Generation, Page 84 201-3 Defined benefit plan obligations and other retirement plans KBR’s 2019 Annual Report and Form 10-K 202-2 Ratios of standard entry level wage by gender All employees are paid at least the legally required minimum wage. compared to local minimum wage 202-4 Financial assistance received from government We received no government financial assistance during the period of this report. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 92

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TOPIC GRI STANDARD SASB COD DISCLOSURE PAGE NUMBER(S) AND/OR URL(S)

203-1 Infrastructure investments and services supported 2019 Annual Report 204-1 Proportion of spending on local suppliers 2019 Annual Report: page 10 205-1 IF-EN-510a.3 Operations assessed for risks related to corruption Global Risk Assessment conducted through ERM Page 29 KBR & Ethics section Page 28 205-2 IF-EN-510a.3 Communication and training about anti-corruption KBR and Ethics section Page 28-29 policies and procedures 205-3 IF-EN-510a.3 Confirmed incidents of corruption and actions taken 2019 Annual Report: page 110-113 IF-EN-410b.1 Amount of backlog for (1) hydrocarbon related projects 2019 Annual Report: page 43 and (2) renewable energy projects Economic IF-EN-410b.2 Amount of backlog cancellations associated with 2019 Annual Report: page 43 hydrocarbon-related projects Quantitative Reporting IF-EN-410b.3 Amount of backlog for non-energy projects associated with 2019 Annual Report: page 43 climate change mitigation Quantitative Reporting IF-EN-510a.2 1. Number of active projects and 2. backlog in countries We did not conduct any projects, nor did we have any backlog in countries that have the 20 lowest rankings that have the 20 lowest rankings in Transparency in Transparency International’s Corruption Perceptions Index International’s Corruption Perception Index F-EN-510a.2 Total amount of monetary losses as a result of legal 2019 Annual Report: page 110-113 proceedings associated with charges of (1) bribery or corruption and (2) anticompetitive practices IF-EN-510a.3 Description of policies and practices for prevention of Governing with Purpose – KBR and Ethics Page 27-28 (1) bribery and corruption, and (2) anti-competitive KBR Code of Business Conduct (COBC) (2) COBC behavior in the project bidding processes GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 93

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Planet GRI 300: Environmental

TOPIC GRI STANDARD SASB CODE DISCLOSURE PAGE NUMBER(S) AND/OR URL(S)

GRI 301: Materials Planet – Our Environmental Strategy page 35 GRI 302:1 IF-EN-160a.2 Energy consumption within the organization Planet – Managing Our Carbon Footprint page 48

GRI 302:3 IF-EN-160a.2 Energy intensity Planet – Managing Our Carbon Footprint Page 48 Environmental GRI 302:4 IF-EN-160a.2 Reduction of energy consumption Planet – Managing Our Carbon Footprint page 48 GRI 303 IF-EN-160a.2 Water and Effluents Planet – Our Environmental Strategy page 35 GRI 304: IF-EN-160a.2 Biodiversity Planet – Our Environmental Strategy page 35 GRI 305: IF-EN-160a.2 Emissions Planet – Our Environmental Strategy page 35 GRI 306: IF-EN-160a.2 Waste Planet – Our Environmental Strategy page 35 GRI 307: IF-EN-160a.1 Environmental Compliance Planet – Our Environmental Strategy Page 35 There were no reported environmental fines over the period of this report GRI 308: Supplier Environmental Assessment Supporting Human Rights – Human Rights policies and procedures - Supplier Code of Conduct Page 81 IF-EN-250a.1 Structural Integrity & Safety There were no defect- and safety-related rework costs during the period of this report IF-EN-250a.2 Structural Integrity & Safety There were no monetary losses as a result of legal proceedings associated with defect- and safety-related incidents. 2019 Annual Report: page 110-113 GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 94

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People GRI 400: Social

TOPIC GRI STANDARD SASB CODE DISCLOSURE PAGE NUMBER(S) AND/OR URL(S)

GRI 401-1 Employment Prosperity - Employment and wealth generation – total number of employees 28,000 GRI 401 -2 Benefits Building our Reputation as a Great Place to Work – Benefits page 52 GRI 401-3 Parental leave Building our Reputation as a Great Place to Work – Benefits page 52 GRI 402 Labor/Management Relations Hires - 7,942 Voluntary turnover - 3,829 Turnover -15% GRI 403-1 IF-EN-320a.1 Occupational Health and Safety management system Committing to the Safety of Our People – Zero Harm Page 53-54 and page 59 GRI 403-2 Risk assessment and incident investigation Committing to the Safety of Our People – Zero Harm Page 53-54 and page 59 GRI 403-3 Occupational health and safety Committing to the Safety of Our People – Zero Harm Page 53-54 and page 59 GRI 403-4 Worker participation, consultation and communication Committing to the Safety of Our People - Courage to Care Conversations – page 54 KBR Listens, Zero Harm Organizational GRI 403-5 Worker Training on OHS Committing to the Safety of Our People Page 53-54 and HSERS page 59 Profile GRI 403-6 Promotion of worker health WorkPlace Options our corporate EAP, Zero Harm, Mental Health and Well-being page 55 GRI 403-7 Prevention from hazards – business relationships Committing to the Safety of Our People, Zero Harm and Security page 54 GRI 403-9 Work-related Injuries Health, Safety and Security by the Numbers page 56 GRI 403-10 Ill-health Health, Safety and Security by the Numbers page 56 GRI 404-2 Training and Education, Programs for upskilling People, Capitalizing on Capability page 68-70 and progression GRI 405-1 Diversity and Equal Opportunity Creating conditions for People to Flourish – An Inclusive and Diverse Workforce Page 67 GRI 406 Non-discrimination There were no legal incidents of discrimination during the reporting period. GRI 407 Freedom of Association and Collective Bargaining KBR and Ethics section Page 28 COBC GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 95

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GRI 408 Child Labor Supporting Human Rights Page 81 GRI 409 Forced or Compulsory Labor Supporting Human Rights Page 81 KBR website GRI 411 Rights of Indigenous Peoples Indigenous Peoples Page 83 GRI 412 Human Rights Assessment Supporting Human Rights Page 81 Organizational Profile GRI 412-2 Human Rights employee training Supporting Human Rights Page 81 GRI 413 Local Communities Prosperity - Our Social Value Section Page 75-79 GRI 414 Supplier Social Assessment Prosperity – Supplier Information Page 82 GRI 416 Customer Health and Safety 2 Quality and Safety Page 63-64 GRI 418 Customer Privacy Committing to the Safety of Our People Page 60 -62 GRI 419 Socioeconomic Compliance There were no of incidents of dispute during the reporting period. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 96

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Taskforce on Climate-related Financial Disclosure - 2019

TCFD PAGE NUMBER(S) DISCLOSURE DISCLOSURE ELEMENT GUIDANCE AND/OR URL(S)

Processes and frequency by which the board and/or board Our Board of Directors provides ultimate oversight over our approach to managing committees (e.g., audit, risk, or other committees) are informed climate change risks and opportunities, via the Sustainability and Corporate Page about climate-related issues. Responsibility Committee as well as our full Board. Our Sustainability and Corporate Responsibility Committee meets typically two times per year. Climate change, including Whether the board and/or board committees consider climate- related issues such as carbon emissions regulation, fossil fuel demand, extreme (A) related issues when reviewing and guiding strategy, major weather, and reputational risks are regular topics of discussion. Our full Board at least Describe the board’s plans of action, risk management policies, annual budgets, annually holds a meeting on climate change related issues, with again topics like the See Sustainability oversight of climate- and business plans as well as setting the organization’s business impacts of the energy transition a topic of discussion at every meeting. Oversight performance objectives, monitoring implementation and related risks and performance, and overseeing major capital expenditures, Our senior managers and executives brief the full Board annually regarding the results opportunities. acquisitions, and divestitures of our annual enterprise risk assessment, including risks related to climate change, and annually review our business continuity planning, which is affected by climate change- How the board monitors and oversees progress against goals related issues, with the Audit Committee. Our senior managers and executives will also See Risks and and targets for addressing climate-related issues brief the Board and its committees, as applicable, throughout the year on an ad-hoc Opportunities Oversight basis on issues directly and indirectly related to climate change.

Whether the organization has assigned climate-related responsibilities

GOVERNANCE to management-level positions or committees; and, if so, whether Our executive leadership regularly discuss the strategic risks and opportunities such management positions or committees report to the board or of issues such as products and services demand from shifts such to lower (B) a committee of the board and whether those responsibilities include carbon energy sources and carbon emissions fees. Our Global Sustainability assessing and/or managing climate-related issue Describe management’s Committee has executive oversight of our approach to environmental matters, See Risks and role in assessing and including climate and energy. The executive team regularly discusses product Opportunities Oversight A description of the associated organizational structure(s) development, innovation, and product life cycle management, including the managing risks and environmental impacts of current and future products. Our Global Sustainability opportunities Processes by which management is informed about Committee team maintains plans to address environmental matters and climate-related issues our Environmental Risk Management team will assess physical and business continuity risks from issues such as extreme weather. How management (through specific positions and/or management committees) monitors climate-related issues GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 97

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TCFD PAGE NUMBER(S) DISCLOSURE DISCLOSURE ELEMENT GUIDANCE AND/OR URL(S)

A description of what they consider to be the relevant Our executive leadership has identified climate-related risks that may affect us over the short-, medium-, and long-term time horizons, taking into short-, medium and longer-term. The key risks include consideration the useful life of the organization’s assets or • Demand risks: Our business is impacted by the degree and speed at which energy (A) infrastructure and the fact that climate-related issues often use transitions away from fossil fuels and the related engineering services we provide Describe management’s manifest themselves over the medium and longer terms to the industry • Regulatory risks: Regulatory impacts on our clients, such as carbon taxes, may role in assessing and A description of the specific climate-related issues for each impact demand. managing risks and time horizon (short, medium, and long term) that could have a • Physical risks: Extreme weather may impact our operations. We have taken actions opportunities material financial impact on the organization to mitigate this including through evaluating and addressing flood and other extreme weather risk at our sites of operation. A description of the process(es) used to determine which risks • Low-carbon opportunity: The transition to low and zero carbon industry and and opportunities could have a material financial impact on transportation offers an opportunity for our company, such as through providing the organization services to the hydrogen sector.

We are focused on investing strategically to profitably address identified climate- related risks and opportunities. Our product and services: We recognize the importance of creating solutions that Organizations should consider including the impact on their enable a clean, low-carbon world. Our leadership in new and sustainable energy businesses and strategy in the following areas: trends involves evaluating and designing solutions focused on green ammonia, renewables, blue and green hydrogen, gas monetization, carbon capture and • Products and services sequestration, helium removal, International Marine Organization (IMO) 2020 • Supply chain and/or value chain marine fuel and green methanol. Our own technology portfolio continues to expand • Adaptation and mitigation activities and differentiate, offering clients unique and innovative solutions in their moves See Energy Transition – • Investment in research and development toward cleaner, greener operations and solutions. Refer to our Technology Solutions Harnessing Opportunity listing. In our work evaluating and designing low-carbon solutions, we focus strongly STRATEGY • Operations (including types of operations and location of facilities) on blue and green ammonia as a vector for hydrogen and as a means for assisting (B) the transition to net-zero economies. Describe the impact of Efficient, carbon-neutral operations: We are committed to continually improving climate-related risks and our energy efficiency and procuring clean energy where possible. In the short term, opportunities on the we are using our carbon footprint to inform our offset program for 2019. We intend to offset all 2019 emissions to become a carbon neutral company. This is also a organization’s businesses, Organizations should describe how climate-related issues serve as means for getting us started with our longer-term strategy, as we intend for this strategy, and financial an input to their financial planning process, the time period(s) used, corporate carbon footprint to be used to develop our holistic climate action strategy. planning. and how these risks and opportunities are prioritized. Organizations’ The 2019 carbon footprint has helped us to identify carbon emissions hotspots and disclosures should reflect a holistic picture of the interdependencies enabled us to set our carbon reduction targets and define climate action goals for among the factors that affect their ability to create value over time. 2020 and onwards. Organizations should also consider including in their disclosures the impact on financial planning in the following areas:

• Operating costs and revenues • Capital expenditures and capital allocation • Acquisitions or divestments • Access to capital GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 98

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Organizations should consider discussing how climate-related risks and opportunities are integrated into their (1) current decision making and (2) strategy formulation, including planning assumptions and objectives around climate change mitigation, adaptation, or opportunities such as: (B) Describe the impact of • Research and development (R&D) and adoption of new climate-related risks and technology. • Existing and committed future activities such as investments, opportunities on the restructuring, write-downs, or impairment of assets. organization’s businesses, • Critical planning assumptions around legacy assets, for strategy, and financial example, strategies to lower carbon-, energy-, and/or water- planning. intensive operations. • How GHG emissions, energy, and water issues, if applicable, are considered in capital planning and allocation; this could include a discussion of major acquisitions and divestments, joint-ventures, and investments in technology, innovation, and new business areas in light of changing climate-related risks and opportunities. • The organization’s flexibility in positioning/repositioning capital to address emerging climate-related risks and opportunities.

Organizations should describe how resilient their strategies are to climate-related risks and opportunities, taking into consideration a

STRATEGY transition to a lower-carbon economy consistent with a 2°C or lower scenario and, where relevant to the organization, scenarios consistent with increased physical climate-related risks.

Organizations should consider discussing: (C) Describe the resilience of • Where they believe their strategies may be affected by climate- the organisation’s strategy, related risks and opportunities taking into consideration • How their strategies might change to address such potential risks different climate-related and opportunities • The climate-related scenarios and associated time horizon(s) scenarios, including a 2°C considered. or lower scenario. Organizations with more than one billion U.S. dollar equivalent We foresee a growth opportunity in the expected adoption of hydrogen and other low- (USDE) in annual revenue should consider conducting more robust carbon technologies. We are investing prudently as the speed of adoption may be faster scenario analysis to assess the resilience of their strategies against a or slower than the market anticipates. A faster adoption may require greater R&D spend. See Energy Transition: range of climate-related scenarios, including a 2°C or lower scenario Our executive leadership and our board closely monitors and assesses the business Harnessing Opportunity and, where relevant to the organization, scenarios consistent with opportunity and resilience of our business to climate change-related demand and increased physical climate-related risks. regulatory shifts. GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 99

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Organizations should consider discussing the implications of different policy assumptions, macro-economic trends, energy pathways, and technology assumptions used in publicly available climate-related scenarios to assess the resilience of their strategies. (C) Describe the resilience of For the climate-related scenarios used, organizations should consider the organisation’s strategy, providing information on the following factors to allow investors and taking into consideration others to understand how conclusions were drawn from scenario different climate-related analysis: STRATEGY scenarios, including a 2°C • Critical input parameters, assumptions, and analytical choices for or lower scenario. the climate related scenarios used, particularly as they relate to key areas such as policy assumptions, energy deployment pathways, technology pathways, and related timing assumptions. • Potential qualitative or quantitative financial implications of the climate-related scenarios, if any.

Organizations should describe their risk management processes for identifying and assessing climate-related risks. An important We maintain an enterprise risk management system to help us identify business risks, aspect of this description is how organizations determine the relative including those related to climate and other environmental and resource-related significance of climate-related risks in relation to other risks. risks (e.g. energy, climate, water, infrastructure) are managed by our environmental (A) management team. The risk management team established a matrix of the top risks for Describe the organization’s Organizations should describe whether they consider existing and the company and periodically assesses the respective severity and frequency. These risks emerging regulatory requirements related to climate change (e.g., processes for identifying include those related to the physical, reputational, economic, and business continuity See Risk and Opportunity limits on emissions) as well as other relevant factors considered. Oversight and assessing climate- impacts that could arise as a result of climate change. related risks. Organizations should also consider disclosing the following: Substantive operational risks are those with the potential to impede the company from providing its services, and are considered possible, likely, more likely or highly likely in • Processes for assessing the potential size and scope of identified the short to long term future. Substantive risks are those that could have an impact on climate-related risks and financial, operational, environmental health and safety matters, reputation and people. • definitions of risk terminology used or references to existing risk classification frameworks used.

Organizations should describe their processes for managing climate- related risks, including how they make decisions to mitigate, transfer, Enterprise-level risks are managed or mitigated through internal policies and procedures accept, or control those risks. In addition, organizations should or other means. The findings of these exercises are reported to the Audit Committee of RISK MANAGEMENT (B) describe their processes for prioritizing climate-related risks, including the Board of Directors and directly to the Board of Directors at least annually. Executive Describe the organization’s how materiality determinations are made within their organizations. champions or company-wide risk owners have been appointed to each of the risks See Risk and Opportunity processes for managing identified. Oversight climate-related risks. In describing their processes for managing climate-related risks, At the project site level, risk champions are expected to build mitigating controls and organizations should address the risks included in Tables 1 and 2, as actions into their respective operational plans. appropriate. https://www.tcfdhub.org/Downloads/pdfs/E08%20-%20 Table%201%20&%202.pdf GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 100

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TCFD PAGE NUMBER(S) DISCLOSURE DISCLOSURE ELEMENT GUIDANCE AND/OR URL(S)

Climate change-related risk identification is integrated into a multi-disciplinary company-wide risk identification, assessment, and management processes. Our Board of Directors regularly and continually receives information intended to (C) appraise the Board of the strategic, operational, commercial, financial, legal, and Describe how processes for compliance risks the Company faces – including those that may arise out of climate See Risk and Opportunity identifying, assessing, and Organizations should describe how their processes for related risks. identifying, assessing, and managing climate-related risks are Oversight and Climate managing climate-related integrated into their overall risk management. Oversight of risk is an ever-changing process in which management is integrated and Related Risks and risks are integrated into the continually seeks opportunities to further deepen enterprise risk management into Opportunities organization’s overall risk business practices throughout the company. management. While the Board has responsibility for oversight of the Company’s risk management practices, the Audit Committee focuses on financial and compliance risk, and receives

RISK MANAGEMENT risk assessment and management reports from the Company’s internal Enterprise Risk Management Committee The Audit Committee receives, reviews, and discusses regular reports from them concerning risk identification and assessment, risk management policies and practices and mitigation initiatives, in order to assure that risk management processes are adapted to the Company’s strategy and operate as expected.

Organizations should provide the key metrics used to measure and manage climate-related risks and opportunities, as described in Tables 1 and 2. Organizations should consider including metrics on climate-related risks associated with water, energy, land use, and waste management where relevant and applicable.

Where climate-related issues are material, organizations should consider describing whether and how related performance metrics (A) are incorporated into remuneration policies. Disclose the metrics used Where relevant, organizations should provide their internal carbon Our efficiency: we monitor energy use and Scope 1, Scope 2 and Scope 3 See Managing our Carbon by the organization to prices as well as climate-related opportunity metrics such as revenue emissions from business travel Footprint assess climate-related risks from products and services designed for a lower-carbon economy. and opportunities in line with its strategy and risk Metrics should be provided for historical periods to allow for trend analysis. In addition, where not apparent, organizations should management process. provide a description of the methodologies used to calculate or estimate climate-related metrics. PERFORMANCE INDICATORS AND TARGETS AND TARGETS INDICATORS PERFORMANCE GOVERNING 2019 Sustainability & Corporate Responsibility Report INTRODUCTION OVERVIEW WITH PURPOSE PLANET PEOPLE PROSPERITY APPENDIX 101

Governing with Purpose Planet GRI 300: People GRI 400: Taskforce on Climate-related Environmental Social Financial Disclosure - 2019

TCFD PAGE NUMBER(S) DISCLOSURE DISCLOSURE ELEMENT GUIDANCE AND/OR URL(S)

For all relevant metrics, organizations should consider providing historical trends and forward-looking projections (by relevant country and/or jurisdiction, business line, or asset type). Organizations should also consider (A) disclosing metrics that support their scenario analysis and strategic Disclose the metrics used planning process and that are used to monitor the organization’s business by the organization to environment from a strategic and risk management perspective. assess climate-related risks Organizations should consider providing key metrics related to GHG and opportunities in line emissions, energy, water, land use, and, if relevant, investments in climate with its strategy and risk adaptation and mitigation that address potential financial aspects of management process. shifting demand, expenditures, asset valuation, and cost of financing. Illustrative examples of metrics for each of the four non-financial groups are provided in the tables listed below. https://www.tcfdhub.org/metrics-and-targets/

Organizations should provide their Scope 1 and Scope 2 GHG emissions and, if appropriate, Scope 3 GHG emissions and the related risks.

(B) GHG emissions should be calculated in line with the GHG Protocol Disclose Scope 1, Scope 2, methodology to allow for aggregation and comparability across organizations and jurisdictions. As appropriate, organizations should consider and, if appropriate, providing related, generally accepted industry-specific GHG efficiency ratios. Scope 1 emissions (2019): 4,324.3 metric tons of CO2-e Scope 3 greenhouse gas Scope 2 emissions (2019): 34,577.9 metric tons of CO2-e (GHG) emissions, and GHG emissions and associated metrics should be provided for historical Scope 3 emissions, business travel (2019): 75,812.4 metric tons of CO2-e the related risks. periods to allow for trend analysis. In addition, where not apparent, organizations should provide a description of the methodologies used to calculate or estimate the metrics.

Organizations should describe their key climate-related targets such as those related to GHG emissions, water usage, energy usage, etc., in line with anticipated regulatory requirements or market constraints or other goals. PERFORMANCE INDICATORS AND TARGETS AND TARGETS INDICATORS PERFORMANCE Other goals may include efficiency or financial goals, financial loss tolerances, (C) avoided GHG emissions through the entire product life cycle, or net revenue Describe the targets used goals for products and services designed for a lower-carbon economy. We have set a target to achieve net-zero carbon emissions by 2030 and have by the organization to committed to doing so through a carbon output reduction of 10% per year. In 2019 we achieved carbon neutrality by offsetting our reported Scope 1, 2 and 3 manage climate-related In describing their targets, organizations should consider including the following: (business travel) emissions. risks and opportunities and performance • Whether the target is absolute or intensity based against targets. • Time frames over which the target applies • Base year from which progress is measured • Key performance indicators used to assess progress against targets.

Where not apparent, organizations should provide a description of the methodologies used to calculate targets and measures.